Major Averages Near Highs at Midday
27-Feb-13 13:05 ET
[BRIEFING.COM] At midday, the S&P 500 is higher by 1.1% as the index trades near its session high. The key averages have spent the first half of today's session in a steady upward climb with cyclical sectors pushing the broader market higher.
Stocks began climbing out of the gate as industrials and materials led the rally in its initial stages. Notably, the Dow Jones Transportation Average surged higher, and is now rising 2.8%. Although transportation stocks are registering gains across the board, JB Hunt (JBHT 69.60, +3.24) and Kansas City Southern (KSU 105.24, +7.40) were the two early outperformers.
Elsewhere in the industrial space, Joy Global (JOY 63.16, +3.20) is higher by 5.3% following better-than-expected earnings and revenue.
The materials sector is also one of the day's leaders as the space rebounds from notable weakness dating back to last week. The SPDR Materials Select Sector ETF (XLB 38.33, +0.58) is rising 1.5%.
The first half of the session also found considerable support in consumer discretionary stocks. Homebuilders are up across the board and the SPDR S&P Homebuilders ETF (XHB 28.26, +0.49) is hovering near its session highs. The strength followed a better-than-expected pending home sales report which showed a 4.5% rise in January sales. Though the report doesn't impact homebuilders directly, healthy demand for pending home is a positive signal when gauging demand for new homes.
Housing was also brought up during Ben Bernanke's testimony before the House Financial Services Committee. The second part of the two-day testimony was largely reflective of yesterday's remarks and the Fed Chairman commented on the need to continue supporting the housing recovery.
In addition to January pending home sales, the market received news of durable goods orders for the same month. Although the headline number fell 5.2%, this was due to a 45.7% drop in defense and nondefense aircraft orders. Excluding transportation, orders rose a solid 1.9% in January.
With cyclical shares marching higher, some defensively-oriented sectors have been more tentative in their advance. Consumer staples are underperforming for the second consecutive session as tobacco-related names weigh. Altria (MO 33.86, -0.43) and Lorillard (LO 38.60, -0.91) are registering respective losses of 1.4% and 2.7% after receiving pre-market downgrades.