U.S. Stocks Pare Gains After Leaders Support Syria Strike

Nichole Harper
03 Sep, 2013
New York City

U.S. stocks pared gains as investors react to merger deals and improving economic news from around the world. Market indexes in New York and Europe turned lower after more political leaders in the U.S. supported president

[R]2:25 PM New York – U.S. stocks pared gains as investors react to merger deals and improving economic news from around the world. Market indexes in New York and Europe turned lower after more political leaders in the U.S. supported president’s call for a military strike against Syria.[/R]

U.S. stocks trimmed early gains as worries about military strike against Syria gathered momentum and Treasury yields advanced to a 2-year high.

On Wall Street, S&P 500 index increased 1.52 to 1,634.47 and the Nasdaq Composite Index added 7.94 to 3,597.63.

A private survey of manufacturing industry showed a larger than expected increase and a government report on construction industry showed an increase as well.

Construction spending increased 0.6% in July from a year ago, better than 0.45% increase expected by several economists and the Commerce Department report.

The Institute for Supply Management said its purchasing managers’ index for August increased to 55.7 from 55.4 in July.

Investors also reacted for the first time after a 3-day weekend to improving economic data from China and Europe.

Two separate surveys in China showed better than expected improvement in manufacturing expansion and Spanish economy showed better than expected growth drivers.

Market indexes in Europe closed down after the U.S. President Barack Obama won approval of House Speaker John Boehner to conduct a military strike against Syria for the use of chemical weapons against rebels on Aug 21 attack.

The alleged attack is used as an excuse by the U.S. to eliminate Assad regime in Syria that could destabilized already volatile Middle East region.

The U.S. has been running large budget and trade deficits and millions of Americans are out of work and the economy is recovering after the Federal Reserve Bank spent more than $800 billion of newly printed money to flood financial system that has begun to stoke inflation.

In London, FTSE 100 index declined 0.6% to 6,468 and in Paris CAC 40 index dropped 0.8% to 3,974. In Frankfurt, DAX 30 index declined 0.8% to 8,181.

Merger Tuesday

In addition, market sentiment was bolstered in the early morning after several deals were announced.

Verizon agreed to pay $120 billion to acquire the remaining stake of 49% in the wireless venture from Vodafone in stock and cash after negotiations that lasted a decade.

Jarden Corp expanded its portfolio of consumer brands after it completed the purchase of Yankee Candle for $1.75 billion.

Microsoft agreed to acquire cell phone handset business from Nokia for $7.2 billion as expected for a year. The deal will revive its position in the wireless business and strengthen its hand against two entrenched players Google and Apple.

U.S. Stocks in Review

Apple Inc ((AAPL)) increased 0.9% and the computer and communication gadgets maker has scheduled industry conference on September 10, when the company is scheduled to announce more new gadgets.

CBS Corp ((CBS)) added 5% after Time Warner Cable and the broadcaster agreed to end a one-month blackout for a substantial increase in retransmission fees.

J.C. Penney ((JCP)) gained 2% and Hayman Capital Management LP reported a 5.2% stake in the struggling department store chain.

Jarden Corp soared 7% after the company agreed to buy Yankee Candle for $1.75 billion. With the acquisition, Jarden expanded its portfolio of consumer brands to 120.

Microsoft Corp ((MSFT)) declined 6% after the software maker agreed to acquire Nokia’s handset business and patents for a total of $7.2 billion. Nokia’s U.S. listed share surged 30%.

Verizon ((VZ)) declined 2% and the company agreed to pay remaining stake in Verizon Wireless from Vodafone $58.9 billion in cash and $60.2 billion in stock.