Stocks rallied for the second consecutive day following back-to-back encouraging economic reports out of China. Additionally, Syria accepted the Russian proposal to handover its chemical weapons to international control. This development also helped the upward movement of major indices as investor tensions over the looming military attack on Syria eased. On the back of these positive developments, the S&P 500 posted its sixth consecutive day of gains. All ten sectors of the S&P 500 industry groups finished in the green, led by industrial and financial stocks.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.9% to close the day at 15191.06. The S&P 500 added 0.7% to finish yesterday’s trading session at 1683.99. The tech-laden Nasdaq Composite Index increased 0.6% to end at 3729.02. The fear-gauge CBOE Volatility Index (VIX) tumbled 7.0% to settle at 14.53. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.5 billion shares, above 2013’s average of 6.24 billion shares. Advancing stocks outnumbered the decliners. For 64% shares that advanced, only 34% declined.
Despite investor apprehensions about the recent tensions between America and Syria, stocks have enjoyed a decent rally. The Dow Jones has gained almost 2.5% whereas the S&P 500 and the Nasdaq have rallied more than 3% till date in the month of September. A series of encouraging domestic and international economic reports are the primary reason behind the stock market rally. But Friday’s non-farm payroll numbers disappointed investors. All these reports will be closely monitored when the Federal Reserve’s policy makers meet on September 17 and 18.
Meanwhile, President Barack Obama is scheduled to give a speech on Syria on Tuesday evening. Obama said on Monday he was not sure whether he will get Congress support on military action against Syria. President Obama told NBC News that: “I'm taking this vote in Congress and what the American people are saying very seriously.”
On the international front, the Street received more encouraging economic reports from China. Industrial output of the world’s second largest economy expanded at the fastest pace in seventeen months in August. According to the country’s National Bureau of Statistics, factory production jumped 10.4% from the year ago period. China’s retail sales also climbed 13.4% in August on a yearly basis, recording its fastest growth in the year 2013. Fixed-asset investment excluding rural households surged 20.3% in August on a yearly basis. A series of promising reports from China indicates that the country’s economy was steadying after decelerating for more than two years
Meanwhile, the S&P Dow Jones Indices said the Goldman Sachs Group Inc (NYSE:GS), Visa Inc (NYSE:V) and Nike Inc (NYSE:NKE) will replace Bank of America Corp (NYSE:BAC), Alcoa Inc (NYSE:AA) and Hewlett-Packard Company (NYSE:HPQ) on the Dow Jones Industrial Average. The changes will take place from September 23.
Industrial sector gained the most among the S&P 500 industry groups and the Industrial Select Sector SPDR (XLI) gained 1.5%. Stocks such as General Electric Company (NYSE:GE), United Technologies Corporation (NYSE:UTX), Union Pacific Corporation (NYSE:UNP), the Boeing Company (NYSE:BA) and United Parcel Service, Inc. (NYSE:UPS) added 2.1%, 1.7%, 0.4%, 0.9% and 1.1%, respectively.
The financial sector also had a good day and the Financial Select Sector SPDR (XLF) gained 1.2%. Stocks such as JPMorgan Chase & Co (NYSE:JPM), Goldman Sachs Group, Citigroup Inc (NYSE:C), PNC Financial Services Group Inc (NYSE:PNC) and U.S. Bancorp (NYSE:USB) jumped 1.5%, 3.5%, 2.0%, 1.0% and 1.1%, respectively.