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Stocks climb on data as tensions ease

Posted
9/10/2013 8:13:00 AM
By: optionMONSTER
Referenced Stocks:SPX

Stocks are climbing today, lifted by strong economic numbers and diminished risk of war.

S&P 500 futures are up more than half a percent and stand near their highs of the session after reports that Syria has accepted a Russian proposal that the country surrender its chemical weapons. European indexes climbed 1.5 percent to 2 percent. Shanghai, Tokyo, Hong Kong, and Singapore all registered gains of about 1 percent overnight.

China's industrial production rose 10.4 percent in August, better than the 9.9 percent forecast by economists. Retail sales and bank lending also beat expectations. These releases add to a chorus of data in recent weeks confirming that the world's key regions of North America, Europe, and Asia have entered their strongest growth phase since before the 2008 mortgage meltdown.

Countless stocks, however, are still near where they traded at the darkest days of the crisis, triggering broad rallies in coal, steel, and emerging-market equities. Ocean shipping stocks, perhaps the most leveraged to a global expansion, have led the market with an average 42 percent gain in the last month, according to our proprietary researchLAB scanning tool.

Another positive in recent sessions has been reduced fears of military action against Syria as lawmakers, voters, and international leaders line up against the Obama administration. The president will attempt once again to make the case for U.S. action in a speech this evening after the market closes.

Today's other big event is a presentation by Apple, which is expected to unveil two new iPhones in an event that begins at 1 p.m. ET. After that, the calendar is relatively free of events until the release of European industrial production and initial jobless claims Thursday morning.

The S&P 500 has managed to hold support at its 100-day moving average all year, and the recent bounce occurred around that level. It added another 1 percent yesterday, and further gains today could propel it strongly above its 50-day moving average for the first time in more than three weeks.

Diminished prospects for war are sending oil down by more than 1 percent despite China's strong industrial numbers. Gold and silver are also retreating 1 percent to 2 percent. Copper, which tracks sentiment toward the global economy more than other commodities, has reversed earlier losses and is now slightly higher. Agricultural foodstuffs are mixed.

Foreign-exchange markets are more clearly bullish as selling continues in the safe-haven Japanese yen. The Australian and Canadian dollars, also correlated to global growth, are rising while the euro is little-changed.

In company-specific news, McDonald's rose more than 1 percent after its sales for August came in much better than expected. Retailer Five Below rallied 14 percent after reporting strong quarterly results. Chinese coal miner L&L Energy is also up sharply on a big increase in production and earnings.