U.S. stocks gain as investors weigh economic data, Syria crisis

Increased Takeovers

Apple Inc. rose 0.6% to $489.88. The world’s largest technology company said it will hold a Sept. 10 event, when it’s projected to announce new iPhones.

J.C. Penney Co. advanced 2.2% to $12.76. Hayman Capital Management LP reported a 5.2% passive stake in the department store chain that is seeking to rebound from its worst sales year in more than two decades.

Stocks gained as the U.S. market is poised for the busiest month of takeovers since October 2012. More than $130 billion of mergers and acquisitions have been announced since the end of August, data compiled by Bloomberg show.

Jarden Corp. jumped 9.6% to $47.05. The company agreed to buy Yankee Candle for $1.75 billion, making its biggest acquisition to add the 43-year-old scented candle maker to its collection of more than 120 consumer brands.

More acquisitions are “indicative of increased confidence in the corporate space in that they view opportunities to take advantage of and feel comfortable using some of their capital to do so.” Ethan Anderson, senior portfolio manager at Rehmann Financial in Grand Rapids, Michigan, said in a phone interview. His firm oversees about $1.5 billion.

Microsoft slid 4.9% to $31.75. The maker of the Windows operating system will pay 3.79 billion euros for Nokia’s devices and 1.65 billion euros for its patents, according to a statement from the companies. Nokia’s U.S.-traded shares surged 32% to $5.14.

Verizon lost 2.9% to $45.99. Verizon will pay Vodafone $58.9 billion in cash, financed with credit, and will issue $60.2 billion in stock to the shareholders of Europe’s largest mobile-phone operator, according to a joint statement.

Volatility Predictions

The Chicago Board Options Exchange Volatility Index, or VIX, fell 0.5% to 16.92 today, after a 26% rally in August. Options strategists from JPMorgan Chase & Co. to Weeden & Co. are predicting that U.S. equity volatility will extend its increase in September after posting its biggest monthly advance in more than a year.

JPMorgan said in an Aug. 29 note that volatility is likely to increase in September and October, and recommended buying puts on global stocks gauges including the S&P 500. Weeden told investors to implement a bearish strategy using October contracts on a security tracking the Russell 2000 Index. The VIX has fallen every September in years when volatility was below its historical average at the start of the month, data since 1996 compiled by Bloomberg show.

“There are a number of catalysts that could drive volatility higher in September such as an escalation in the Syrian crisis, further deterioration in emerging markets, or larger-than-expected tapering by the Fed,” Mandy Xu, a New York-based equity-derivatives strategist at Credit Suisse Group AG, said in an Aug. 29 interview.


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