Stocks Gain as China Grows, Syria Tensions Ebb
NEW YORK (TheStreet) -- U.S. stocks gained Tuesday as China extended a trend of strong economic data and the possibility of a diplomatic resolution over Syria appeared to outpace the likelihood of a military strike.
Japanese and Chinese stocks jumped overnight as Japan's Nikkei average surged 1.53% to 14,423 and Hong Kong's Hang Seng climbed 0.99% to 22,977. The pop came amid a larger-than-expected annual rise in China's industrial production for August, which increased 10.4%, up from the prior month's reading of 9.7% and above economists' forecasts. Chinese retail sales in August rose 13.4% year over year, besting the previous reading of 13.2%, and nudging past analysts' predictions.
"There isn't a red speck on my screen for anything in Asia," Darrell Cronk, regional chief investment officer at Wells Fargo Private Bank, said about market performance on the continent. "This intense negative sentiment or outlook on emerging markets, I think, is at least moving back to a neutral stance."U.S. Secretary of State John Kerry suggested Monday that Syria could avoid military intervention if the Middle Eastern country handed over its chemical weapons for international control. The suggestion triggered a move by Syria to say it would agree to hand over those weapons to Russia. President Barack Obama called the development "potentially positive," which has eased market fears of a war. Apple unveiled two new iPhones at an event in Cupertino, Calif. The iPhone 5C is a lower cost option to the iPhone 5S, which will offer "Touch ID" -- a fingerprint sensor added to the home button to unlock the phone. Both phones will roll out the new iOS7 operating system. Shares lost 2.3% to $494.64. On the U.S. economic calendar, the Small Business Optimism Index for August reached 94, which was little changed from July's 94.1 reading, according to the National Federation of Independent Business. The ICSC-Goldman store sales index rose 1.5% in the week ended Sept. 7. The report showed a large pop from the prior week's 0.6% decline. The latest Redbook, similarly, saw very little change as same-store sales rose 4.6% for the week ended Sept. 7. The Labor Department's Job Openings and Labor Turnover Survey reported 3.69 million job openings on the last business day of July. In company news, Nike (NKE), Visa (V) and Goldman Sachs (GS) will replace Alcoa (AA), Hewlett-Packard (HPQ) and Bank of America (BAC), respectively, on the Dow Jones Industrial Average, S&P Dow Jones Indices said in a statement. The changes will be effective as trading opens on Sept. 23. Bank of America rose 0.9% to $14.61 as the bank said it will reduce the size of its mortgage lending operations. Bloomberg said the bank would cut 2,100 jobs and shutter 16 offices by Oct. 31, citing two people with direct knowledge of the plan. "We continue to reduce the size of our mortgage servicing operations in line with the successful reduction of our portfolio of delinquent mortgage customers," Bank of America said in an emailed statement. "Bank of America has a strong track record for helping our employees identify opportunities both inside and outside of the bank and we are working closely with leaders in the community to support a smooth transition." Netflix (NFLX) was the top performing stock on the S&P 500 as Virgin Media announced that it had agreed to offer the internet streaming service's app for its cable TV subscribers. Shares of the company popped 6.4% to $313.06, and at one point hit an all-time high at $313.24. Urban Outfitters (URBN) was the worst performer on the S&P after the retailer reported that sales would grow during the quarter at mid-single digit pace, which missed analysts' forecast. Shares plummeted 10.2% to $38.35. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux
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