S&P 500 Gains for 5th Day as Chinese Exports Top Forecast
<cite class="byline" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-size: 11px; vertical-align: baseline; background-color: transparent; width: 640px; color: rgb(111, 111, 111); display: block; font-style: normal; line-height: 1.3em; position: static !important; background-position: initial initial; background-repeat: initial initial;">By Nikolaj Gammeltoft & Alexis Xydias - Sep 9, 2013 11:00 PM GMT+0800</cite>
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a fifth straight day, as exports from China topped forecasts.
Apple Inc. rose 1.4 percent before an investor event tomorrow where the company will unveil new models of the iPhone. Delta Air Lines Inc. (DAL) rallied 7 percent as S&P Dow Jones Indices said the world’s second-largest carrier will replace BMC Software Inc. in the S&P 500. (SPX) Molex Inc. jumped 31 percent after agreeing to be acquired by Koch Industries Inc.
The S&P 500 gained 0.5 percent to 1,663.10 at 10:58 a.m. in New York. The Dow Jones Industrial Average added 85.83 points, or 0.6 percent, to 15,008.33. Trading in S&P 500 stocks was 5.1 percent lower than the 30-day average at this time of day.
“We’re latching on to the better trading in Asia after the Chinese data,” Robert Pavlik, New York-based chief market strategist at Banyan Partners LLC, said by phone. His firm manages about $4.4 billion. “The fact that nothing has transpired in Syria is also a positive in a strange sense. The Street is somewhat relieved that the U.S. hasn’t engaged in military action yet.”
The S&P 500 advanced 1.4 percent last week as data showed signs of economic growth and investors weighed prospects for central bank stimulus cuts amid tensions over Syria. The benchmark for U.S. equities retreated as much as 4.6 percent from the record high on Aug. 2. It has rebounded 2 percent from a two-month low on Aug. 27.
Chinese exports climbed 7.2 percent in August from a year earlier, the General Administration of Customs said in Beijing yesterday. That compared with the 5.5 percent median estimate of 46 economists surveyed by Bloomberg and July’s 5.1 percent gain. Imports increased a less-than-estimated 7 percent.
Fed Stimulus
The equities gauge has rallied 17 percent this year as the Fed continued to provide stimulus to the economy. A report Sept. 6 showed payrolls in the U.S. climbed less than projected in August and gains in the prior two months were revised downward, fueling speculation that any Fed move to taper its stimulus program will be limited.
Economists forecast the central bank will reduce its monthly $85 billion in asset buying by $10 billion at its meeting on Sept. 17-18, according to the median of 34 responses in a Bloomberg News survey of economists.
“Economic data out of Asia seems to be supporting markets, but no doubt investors will remain vigilant in the short term about any developments in the Syria situation and the next move from the Federal Reserve,” James Butterfill, who helps oversee $44 billion as head of global equity strategy at Coutts & Co. in London, said by phone.
Presidential Persuasion
President Barack Obama will try this week to persuade a skeptical Congress and a reluctant public to support air strikes against Syria. He failed to win backing from foreign leaders at last week’s Group of 20 summit for military action in response to a chemical weapons attack that his administration says killed more than 1,400 people.
The Senate is expected to vote on a resolution by the end of this week and the House of Representatives will probably debate the proposal next week. Secretary of State John Kerry said in London today that the Syrian conflict requires a political solution.
“A resolution will not be found on the battlefield but at the negotiating table,” Kerry told reporters. “But we have to get to that table.”
Volatility Index
The Chicago Board Options Exchange Volatility Index (VIX), or VIX, rose 0.5 percent to 15.93. The equity volatility gauge has cut its decline this year to 12 percent after rallying 35 percent since Aug. 5.
Raw-materials producers, industrial and technology shares rose at least 0.8 percent to lead the S&P 500’s 10 main groups. An S&P index of homebuilders jumped 4 percent.
Apple added 1.4 percent to $505.09. The company will unveil a less expensive version of the iPhone and an upgrade of the iPhone 5 tomorrow, people with knowledge of the matter have said. The device is the country’s top-selling smartphone. FBN Securities Inc. raised its priced target on the stock to $600 from $575 today.
Delta advanced 7 percent, the most since April, to $21.29. The airline will join the S&P 500 after the close of trading tomorrow, according to a statement from S&P Dow Jones Indices on Sept. 6, making Atlanta-based Delta the second carrier in the index after Southwest Airlines Co. BMC is leaving the gauge after being bought by Bain Capital LLC.
Koch Brothers
Molex (MOLX) soared 31 percent to $38.54. The maker of electronic components for products such as Apple’s iPhone agreed to a $7.2 billion acquisition by Koch Industries, the holding company controlled by the billionaire Koch brothers.
Koch will buy Molex’s shares for $38.50 apiece, a 31 percent premium over the publicly traded common stock, according to a statement today.
Crown Castle International Corp. (CCI) climbed 1.4 percent to $71.50. The provider of infrastructure for wireless communications said it will take steps to qualify as a real estate investment trust for tax purposes.
Expedia Inc. climbed 3.2 percent to $51.27. The provider of online travel services was raised to buy from neutral by Lazard Capital Markets LLC.
To contact the reporters on this story: Alexis Xydias in London at [email protected]; Nikolaj Gammeltoft in New York at [email protected]
To contact the editor responsible for this story: Lynn Thomasson [email protected]
