By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks leapt on Wednesday after
Ford Motor Co. reported its best retail-sales month in seven years
and as investors tracked hearings on a proposed U.S. strike against
Syria.
"Everybody was so focused on political dysfunction with the
upcoming debt-ceiling debate, and this latest international crisis
has shown a very unusual bipartisanship coming out of Washington,"
said Ron Florence, deputy chief investment officer for investment
strategy, Wells Fargo Bank.
After an early 35-point fall, the Dow Jones Industrial Average
(DJI) rose as much as 123 points, and was lately up 112.72 points,
or 0.8%, at 14,946.8.
"The short-term volatility is all around how the world is going
to respond to a humanitarian crisis," Florence added.
Intel Corp. (INTC) led gains that included 27 of the Dow's 30
components. Leading blue-chip losses, Microsoft Corp. (MSFT) fell
2.2% after Morgan Stanley cut its rating on the software maker
following its deal to acquire Nokia Corp.'s (NOK) devices
business.
Benchmark indexes traveled to session highs as U.S. Secretary of
State John Kerry and Secretary of Defense Chuck Hagel spoke at a
House hearing on the White House request for congressional approval
of a limited strike against the Syrian regime.
A Senate committee expected to vote later in the day on a
resolution supporting the use of U.S. military force in Syria.
The S&P 500 index (SPX) advanced 14.14 points, or 0.9%, to
1,653.91, with telecommunications and health care the best
performing and utilities the sole decliner of its 10 major
industries.
ETrade Financial Corp. (ETFCD) rallied 9.1% after it said
regulators had approved its request to use capital from its bank
subsidiary for wider corporate purposes.
Bolstering technology shares, Apple Inc. (AAPL) rose $10.42, or
2.1%, to $499 after Cantor Fitzgerald LP started coverage of its
shares with a buy rating and a 12-month target of $777. Apple has
announced a Sept. 10 event to display its new iPhone models and a
second event in Beijing a day later that is adding to investor
optimism.
Shares of LinkedIn Corp. (LNKD) fell 1.7% after the
professional-networking site said in a securities filing it would
sell 4.17 million of its Class-A stock, estimating it would reap $1
billion.
The Nasdaq Composite (RIXF) rose 34.26 points, or 1%, to
3,646.86.
The Nasdaq (NDAQ) experienced another glitch with its main data
feed that halted trading for roughly three hours almost two weeks
ago. The exchange said the outrage affected its ability to transmit
quotes in stock symbols PC through SPZ. The trouble has been
resolved, and trading was not impacted, Nasdaq said.
Advancers pulled ahead of decliners by a more than 2-to-1 ratio
on the New York Stock Exchange, where 317 million shares traded as
of 1:55 p.m. Eastern. Composite volume neared 1.9 billion.
Ford shares (F) rallied 3.6% after the vehicle manufacturer
reported a spike in sales last month from a year earlier. and hiked
its production plan for the fourth quarter.
"Equity investors appear to be reacting to a positive outlook
reflected by Ford's decision to boost output -- itself a sign that
a Fed tapering would arrive as the economy is strengthening, not
weakening," wrote Andrew Wilkinson, chief economic strategist at
Miller Tabak & Co., referring to the consensus expectation that
the Federal Reserve would begin scaling back its monetary stimulus
later this month.
In a televised news conference with Sweden's prime minister,
President Barack Obama continued to make his case for a military
reply to the use of chemical weapons against civilians in Syria
last month.
"We believe very strongly with high confidence that chemical
weapons were used; we want to join with the international community
for an effective response," Obama said. "Even Syria doesn't deny
they were used; the only remaining dispute is who used them," Obama
said in Stockholm, as his top national security aides briefed
lawmakers in public and private hearings on Capitol Hill.
The president also said the world should not find excuses not to
act and that he believes a strong message can be sent to the Syrian
regime. "It was this reach out in such terms that resulted in the
drop in oil and gold," said Peter Boockvar, chief market strategist
at the Lindsey Group LLC, in emailed comments.
On the New York Mercantile Exchange, both crude and gold futures
fell, with oil (CLV3) down $1.51, or 1.4%, at $107.03 a barrel and
gold (GCZ3) losing $22, or 1.6%, to $1,390 an ounce.
The Federal Reserve releases its Beige Book survey of economic
conditions in its 12 districts at 2 p.m. Eastern time. Investors
will be looking for clues as to the timing and amounts of any cuts
in the central bank's $85 billion in monthly bond purchases.
"We continue to expect the Fed to taper later this month and its
impact on the dollar could have very negative impacts on certain
emerging-market economies," Nick Raich, CEO at the Earnings Scout,
wrote in a research note.
The U.S. dollar (DXY) edged lower against currency rivals
including the yen (USDJPY) and euro (EURUSD). U.S. Treasury prices
were mixed, with the yield on the 10-year note (10_YEAR) rising 4
basis points to 2.889%.
Ahead of the Fed's release, San Francisco Fed President John
Williams said the central bank should start curbing its stimulus
later this year and stop it altogether by the middle of next, so
long as the labor market continues to improve and inflation rises
toward 2%.
On Friday, the government releases U.S. payrolls data for
August, with the monthly report coming a day after Automatic Data
Processing Inc. releases hiring data for last month. The labor
market is a concern of the Fed and would likely factor in to any
decisions made at the Federal Open Market Committee gathering later
this month.
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