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US stocks rise at hint of Syria deal

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Published on: Tuesday, September 10, 2013

US stocks have risen, helped by optimism that a military strike on Syria might be avoided.

The Dow Jones Industrial Average gained 140.62 (0.94 per cent) to 15,063.12 on Monday.

The broad-based S&P 500 increased 16.54 (1.00 per cent) to 1,671.71, while the tech-rich Nasdaq Composite Index put on 46.17 (1.26) at 3,706.18.

Stocks opened higher Monday morning after strong Chinese export data suggested better times for the world’s second-biggest economy.

The rally was given further strength by a Russian proposal to put Syrian chemical weapons under international control.

The US reacted cautiously to the plan, which comes as President Barack Obama faces a sceptical reception in Congress to plans to launch a military strike on Syria. Stocks moved higher at midday and stayed fairly high through the close.

“The market seems to be anticipating that a strike can be avoided and a deal can be worked out,” said Peter Cardillo, chief market economist at Rockwell Global Capital.

Molex, a manufacturer of electronic components, surged 31.7 per cent on news it is being acquired by Koch Industries for $US7.2 billion.

Technology giant Apple, the largest US company by market capitalisation, shot up 1.6 per cent ahead of a Tuesday event that is expected to launch new products.

Several other large technology firms also faired well, including Dow components Microsoft (up 1.6 per cent) and Cisco (up 1.6 per cent).

The biggest gain in the Dow came from industrial machinery manufacturer Caterpillar, which rose 2.6 per cent. Cat often gains on positive China economic news because of its heavy leverage to the Chinese mining sector.

Computer maker Dell finished unchanged after activist Carl Icahn indicated he will not offer a counterproposal to the latest buyout offer from a consortium led by founder Michael Dell.

Athletic-wear company Lululemon Athletica rose 2.6 per cent after Citi Research initiated coverage with a “buy” rating.

Delta Air Lines rose 9.4 per cent ahead of its joining the S&P 500 index after trade Tuesday.

Bond prices rose. The yield on the 10-year Treasury fell to 2.90 per cent from 2.94 per cent Friday, while the 30-year dropped to 3.84 per cent from 3.87 per cent. Prices and yields move inversely.

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