Mid-Day Update: Stocks Hold Gains as Low Inflation Report Supports Fed Policy

12:41 PM Eastern Daylight Time, 03/17/2010 (MidnightTrader) — Here’s where markets stand at mid-day:

-NYSE up 48.28 (0.65%) to 7,474.98.

-DJIA up 44.90 (0.42%) to 10,730.88.

-S&P 500 up 6.78 (0.58%) to 1,166.24.

-Nasdaq up 14.23 (0.60%) to 2,392.24.

GLOBAL SENTIMENT

Hang Seng up 1.72%

Nikkei up 1.17%

FTSE up 0.73%

Top 5 % Movers on NYSE

C, +0.99%

GE, +1.33%

BAC, +1.12%

AA, +4.71%

F, +2.08%

Top 5 % Gainers on NYSE

GKK-PA, +18.26%

BOI, +17.78%

CPF, +15.85%

BBX, +14.92%

FRE-PH, +10.67%

Top 5 % Decliners on NYSE

AGM, -13.57%

HEK-WT, -9.70%

AGM-A, -9.25%

WHI, -8.05%

CBC-PB, -8.05%

MID-DAY NYSE INDEX WATCH

NYSE Energy +0.99% at 11,473.29

NYSE Financial +1% at 5,065.44

NYSE Health Care -0.17% at 6,464.21

NYSE Arca Tech 100 +0.55% at 929.07

UPSIDE MOVERS

(+) LSI (+7.73%) guides for Q1 mostly above Street view.

(+) PLCM (+9.92%) gains on reported tie-up with India-based firm, private equity interest.

DOWNSIDE MOVERS

(-) ERIC (-3.42%) gets downgrade

(-) FUQI (-36.32%) continues evening slide seen after guiding for Q4 below prior view, Street estimate.

(-) BBI (-32.62%) may file for bankruptcy.

(-,+) HIG (+5.14%) rebounds from evening drop after announcing share sales, buying back securities issued to Treasury.

(-) TOO (-4.93%) prices offering.

MARKET DIRECTION

Stock are holding gains at mid-day but idling with fractional gains, after the Federal Reserve and the Japanese central bank reaffirmed plans to keep interest rates low in an effort to drive economic growth and a new report showed inflation under control.

Fed Chairman Ben Bernanke is expected to tell a House hearing, to opposed any roll-back in the Fed’s role in overseeing the nation’s banks. The Fed boss will argue that policymakers factor information they get from the Fed’s role as bank regulator into their decisions on interest rates. And, Bernanke said its banking duties give the Fed insights into the health of the entire banking system.

Crude oil for April delivery was up $0.61 cents, or 0.8%, at $82.31 a barrel in electronic trade. Earlier in the day, the Energy Information Administration said U.S. crude inventories were up by 1 million barrels in the week ended March 12, less than some analysts expected. Analysts polled by Platts expected an increase of 1.9 million barrels in crude supplies. Also Wednesday, the Organization of the Petroleum Exporting Countries decided in Vienna on Wednesday to maintain the cartel’s current oil output, according to a statement published on OPEC’s Web site.

The Labor Department’s Producer Price Index fell 0.6% in February, its steepest drop in seven months, surprising economists who were looking for a drop of 0.2%, suggesting that deflation is still lurking. Excluding volatile energy and food costs, the index rose 0.1%, in line with expectations

Japan led overseas markets higher after its central bank kept a key interest rate at 0.1% and expanded money available through its short-term lending program. In the U.K., data showed an unexpected drop in jobless claims during February, the biggest monthly fall since November 1997. That report sent the British pound up against the U.S. dollar and the euro.

Stocks eked out gains yesterday after the Fed’s announcement. The Dow rose 43 points and is now at its highest level since mid-January. The S&P 500 rose 9 points to close at its highest level since October 2008. The market has been posting steady gains for about a month. The Dow has risen six straight days.

The dollar is down against other major currencies. Gold for April delivery was up $2, or 0.1%, at $1,123.80 an ounce in electronic trading.