The S&P 500 fell 3.1% in August amid concern the Federal Reserve would reduce its monthly bond purchases and the U.S. would take military action against Syria. Better-than- estimated corporate earnings and monetary stimulus from the Fed have driven the index as much as 153% from a 12-year low in 2009, with the gauge reaching a record 1,709.67 on Aug. 2.
The Fed holds a policy meeting on Sept. 17-18 to decide whether to slow the pace of its bond-buying program. Chairman Ben S. Bernanke has said that the central bank may reduce its monthly purchases if the employment outlook substantially improves and the economy grows in line with forecasts.
Global stocks rose yesterday as data showed China’s manufacturing index increased to a 16-month high in August, while other gauges showed euro-area factory output expanded at a faster pace than initially estimated in August.
Among today’s reports, the Institute for Supply Management’s manufacturing index increased to 55.7 in August from 55.4 a month earlier, the Tempe, Arizona-based group said. The median forecast of 85 economists surveyed by Bloomberg called for the measure to rise to 52. Another report showed construction spending in the U.S. increased in July to the highest level in four years, propelled by gains in residential real estate.
Consumer-discretionary, financial and health-care shares climbed more than 0.6% for the biggest gains among 10 S&P 500 industries. Utilities and phone companies had the biggest declines, dropping at least 1.2%.
CBS rose 4.2% to $53.26. The broadcaster’s programs returned to Time Warner Cable in New York, Los Angeles and Dallas after the companies ended a one-month blackout, in time for the start of National Football League regular-season games.
Time Warner Cable agreed to pay a significant increase for the right to transmit CBS signals, according to people with knowledge of the situation who asked not to be identified because the terms are private. Shares of Time Warner Cable added 1.7% to $109.20.
Citigroup Inc. climbed 2.1% to $49.34. The third- biggest U.S. bank by assets has sold more than $6 billion in private-equity and hedge-fund assets in the past month, the Wall Street Journal reported, citing unidentified people familiar with the transactions.
Bank of America Corp. added 1% to $14.26 after terms obtained by Bloomberg News showed the lender is selling its remaining 2 billion shares in China Construction Bank Corp. for HK$5.63 to HK$5.81 apiece. The second-biggest U.S. lender first invested in Construction Bank in 2005.