By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks rallied on Tuesday, with
the S&P 500 continuing its longest stretch of gains since
mid-July, after positive economic data from China and indications
that U.S. military action against Syria might be averted.
"The markets are right now breathing a sigh of relief that we're
moving closer to a diplomatic solution as opposed to a military
solution in Syria," said Darrell Cronk, regional chief investment
officer for Wells Fargo Private Bank. "Any military solution would
cause some angst" by creating uncertainty as to its scale and
duration, Cronk said.
On Tuesday, France said it would submit a Russian-backed
proposal to confiscate Syria's chemical arms to the United Nations,
and Interfax reported that the regime in Syria had said it would go
along with the plan.
President Barack Obama was scheduled to detail his plans
regarding Syria in a nationally televised address scheduled for 9
p.m. Eastern.
"Overnight, we had really strong economic data out of China,
both their industrial production numbers and their retail-sales
numbers were up double digits over year-ago numbers. That has Asian
markets up nicely," Cronk added of reports from Beijing's National
Bureau of Statistics.
The data had China's industrial output rising 10.4% in August
from a year ago and retail sales gaining 13.4%. Wall Street
finished higher on Monday after China reported exports growth that
surpassed expectations.
On Tuesday, the Dow Jones Industrial Average (DJI) rose 114.65
points, or 0.8%, to 15,177.77.
The index's makeup will change dramatically as of the open on
Sept. 23, with Goldman Sachs Group Inc. (GS) replacing Bank of
America Corp. (BAC), Visa Inc. (V) evicting Hewlett-Packard Co.
(HPQ), and Nike Inc. (NKE) bumping Alcoa Inc. (AA), S&P Dow
Jones Indices said on Tuesday.
Shares of Hewlett-Packard and Alcoa fell on the news, with the
former off 1% and the latter down 0.3%, while Bank of America was
up 0.9%.
Goldman Sachs rose 3.1%, Visa gained 1.9% and Nike advanced
2.2%.
"You've replaced two stocks that essentially don't matter in
Alcoa and Bank of America with two that do," Dan Greenhaus, chief
market strategist at BTIG LLC, emailed.
Extending gains into a sixth consecutive session, the S&P
500 index (SPX) rose 11.71 points, or 0.7%, to 1,683.42, with
industrials and financials leading sector gains and energy the sole
laggard among its 10 major sectors.
Apple Inc. (AAPL) fell 0.6% as the consumer-technology company
readied to reveal its new iPhone models. Follow streaming coverage
of Apple.
The Nasdaq Composite (RIXF) climbed 21.12 points, or 0.6%, to
3,727.32.
For every share falling, more than two rose on the New York
Stock Exchange, where 180 million shares traded as of 10:45 a.m.
Eastern.
Composite volume reached 939 million.
The price of crude (CLV3) fell $2.54, or 2.3%, to $106.98 a
barrel and gold futures (GCZ3) slid $23.00, or 1.7%, to $1,363.70
an ounce on the New York Mercantile Exchange.
"Gold is probably selling off today and yesterday on Syria news.
Gold, oil and the U.S. dollar tend to be affected by geopolitical
risk," said Cronk at Wells Fargo.
The dollar (DXY) gained against the currencies of major U.S.
trading partners and Treasury prices fell, with the yield on the
10-year note (10_YEAR) up three basis points to 2.953%.
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