U.S. Stocks Rise as Energy Shares Gain Amid Syria Concern
<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 Nick Taborek & Namitha Jagadeesh - Aug 29, 2013 12:08 AM GMT+0800</cite>
U.S. stocks rose, after the Standard & Poor’s 500 Index dropped to an eight-week low yesterday, as energy shares rallied on higher oil prices amid growing speculation there will be a military strike against Syria. Chevron Corp. and Exxon Mobil Corp. jumped more than 2.2 percent. TiVo (TIVO) Inc. climbed 5.2 percent after the maker of digital-video recorders posted a profit. Joy Global Inc. lost 3.8 percent as the mining equipment maker said orders for new equipment are declining. PulteGroup Inc. and D.R. Horton Inc. declined at least 1.3 percent as pending sales of existing homes unexpectedly fell in July.
The S&P 500 rose 0.5 percent to 1,638.34 at 12:05 p.m. in New York. The Dow Jones Industrial Average added 57.29 points, or 0.4 percent, to 14,833.42. Trading in S&P 500 stocks was 8 percent below the 30-day average at this time of day.
“This is an environment where people are really focused on one variable which is going to dominate all others, and that, today, is Syria,” Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $380 billion, said in a phone interview. “The reflex is to sell during times of sudden unexpected conflict and. Weakness derived from temporary events can often times be a great buying opportunity.”
The S&P 500 slid 1.6 percent yesterday to the lowest level since July 3 amid concern the U.S. will take action against Syria. The U.S. and its allies are moving closer to a military strike in response to an alleged chemical weapons attack near Damascus last week. President Barack Obama plans to release an intelligence assessment this week and U.K. Prime Minister David Cameron said Britain will put forward a draft resolution at the United Nations today authorizing action to protect civilians.
NATO Allies
Obama officials are in consultations with NATO allies including the U.K., France, Germany, andTurkey as well as Arab nations to determine which countries would participate in a military strike on Syria, said an administration official, speaking on the condition of anonymity to discuss war planning efforts.
The S&P 500 has lost 4.2 percent from a record high on Aug. 2 amid growing speculation the Federal Reserve will reduce its monthly bond buying. Minutes of the central bank’s July meeting released Aug. 21 showed policy makers supported stimulus cuts this year if the economy improves. Fed stimulus helped push the S&P 500 up as much as 153 percent from its March 2009 low, as better-than-estimated corporate earnings also fueled gains.
Home Data
Data today showed fewer Americans signed contracts in July to buy previously owned homes. The index of pending home sales dropped 1.3 percent, the most this year, after a 0.4 percent decrease in June, according to figures from the National Association of Realtors. Economists forecast no change in the gauge from the month before, according to a median estimate in a Bloomberg survey. An S&P index of homebuilders fell 1.1 percent. PulteGroup lost 1.3 percent to $15.40 while D.R. Horton declined 1.8 percent to $17.66.
The Chicago Board Options Exchange Volatility Index (VIX), or VIX, fell 3.3 percent to 16.21. The equity volatility gauge has surged 37 percent since a five-month low on Aug. 5. Eight out of 10 main industry groups in the S&P 500 rose, with energy companies jumping 2 percent to pace advances. Chevron advanced 2.6 percent to $121.85. Exxon Mobil rallied 2.2 percent to $88.74. Marathon Oil Corp. increased 3.3 percent to $34.48.
TiVo, Avago
TiVo advanced 5.2 percent to $11.54 after reporting second-quarter net income of $268.9 million, including legal settlements, compared with a $27 million loss a year earlier. Chief Executive Officer Tom Rogers said in an interview the company will be profitable for the remainder of the fiscal year ending January and through the following year.
Avago Technologies Ltd. surged 4.7 percent to $38.27. The supplier of components for wireless communications reported third-quarter revenue of $664 million, exceeding the $617.25 million average forecast of analysts surveyed by Bloomberg.
Zale Corp. rose 20 percent to $10.78. The jewelery retailer reported fourth-quarter revenue that beat analyst estimates as same-store sales jumped 5.6 percent.
Express Inc. (EXPR) gained 5.9 percent to $20.97. The specialty retailer said same-store sales rose 6 percent in the second quarter, beating analysts’ estimates, and raised its profit forecast.
Joy Global lost 3.8 percent to $49.37. The mining equipment producer’s CEO, Mike Sutherlin, said the market “has become even more challenging,” as customers’ declining cash flows are resulting in “significantly” reduced capital expenditures. Caterpillar Inc. slid 0.5 percent to $82.25.
Taser International Inc. (TASR) fell 4.4 percent to $11.33, after rising 38 percent in the past 11 trading days. The maker of stun guns declined after JPMorgan analysts downgraded the shares to neutral from overweight.
To contact the reporters on this story: Nick Taborek in New York at [email protected]; Namitha Jagadeesh in London at [email protected]
To contact the editors responsible for this story: Andrew Rummer at [email protected]; Lynn Thomasson at [email protected]
