The markets opened strong on the back of Hewlett Packard’s earnings beat after yesterday’s close and have stayed there all day.  Data Storage stocks are outpacing the market led by Western Digital (WDC) and Seagate Technology (STX). 

The S&P500 and Nasdaq are both up about 0.80%, with the Dow gaining 0.50%. The S&P has been flirting with its 50-day but has not been able to break above it.  If the Nasdaq can hang on to it's gains, it will be positive for the week, up about 0.6%.  The Dow and S&P however are still down on the week.   

 The Fed’s Monetary Policy Report to Congress out this morning noted that expectations for inflation will continue to move towards its 2.0% year on year target.  According to the Fed, while we may be at or nearing full employment, wages have been consistent or even slowed, including industries where finding qualified workers is constrained (hospitality and transportation).  The Fed expects rate hikes will be gradual.  "The FOMC expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong." Jerome Powell will make his first appearance as Fed Chair on February 28, and this report will be the roadmap for his comments.

U.S. Treasuries yields have pulled back since the report came out.  The 10 year is now 2.87%, after reaching 2.95% earlier in the week.  The 30-yr is trading around 3.16% and the 2-yr, which hit a level not seen since 2008, was down to 2.23%.  The lower yields are lending support to the rally as the fear of higher rates abates.

Oil is also up today after starting the day lower on news that there was a shutdown in Libya of the El Feel oilfield.  Here at home, WTI is trading at $63.60 up 1.31%.  ConocoPhillips is leading the energy sector as crude trades at the high end of its two-week range. 

The latest Baker Hughes reports shows 1 oil rig was added last week taking the total to 799, up 197 from a year ago period.  This is the 5^th consecutive week of rig additions. 

At midday, advancers far outpace decliners 2154/734 on the NYSE and 1527/1039 on the Nasdaq.   As we head into the weekend, buyers may step back as the market continues to coil.

Have a great weekend.