Midday Market Update: Markets Upbeat on Industrials | ETF Trends

U.S. stocks and exchange traded funds (ETFs) gained ground this morning on upbeat economic news, which included promising news about industrial production.

The Federal Reserve announced that industrial activity rose 0.8% in August, beating the 0.6% forecast by economists.  The Fed also revised July’s numbers to a rise of 1%, twice as much as previously reported.  The news sent the PowerShares Dynamic Basic Materials ETF (NYSEArca: PYZ) up 0.8% in morning trading.

The Labor Department reported that consumer prices rose in August. In fact, the “core” consumer price index rose by 1.4% over the 12 months ending in August.  This could be good news in that this rise means the central bank faces little pressure to raise its benchmark interest rate, a step it takes to ward off high inflation, report Christopher S. Rugaber and Jeaninne Aversa of the Associated Press.

U.S. long-term securities are not as attractive to foreign investors as they once were.  Foreigners purchased $15.3 billion more assets than they sold in July, compared to $90.7 billion more assets than sold in June.  China, however, is still highly attracted to U.S. securities, as the emerging nation increased its holdings of U.S. Treasuries from $776.4 billion in June to $800.5 billion in July.  These holdings are a direct result of the huge trade deficits the United States runs with the emerging Asian power.