U.S. stocks gain while Middle-East shares slump, metals decline

Ford, GM

Ford and GM jumped 3.5% and 5%, respectively. Sales of cars and light trucks rose 15% for GM, 23% for Toyota Motor Corp. and 12% for Ford, according to company statements. The results compared with average estimates for gains of 11% by GM, 15% for Toyota and 10% for Ford in a survey by Bloomberg News.

Benchmark indexes held their gains as the Senate Foreign Relations Committee voted to authorize President Barack Obama to conduct a limited U.S. military operation in Syria, the first step toward congressional endorsement of the effort. The resolution, approved 10-7, supports use of force in a “limited and specified manner against legitimate military targets” during a 60-day period following enactment, with a possible 30-day extension at Obama’s request. The resolution doesn’t authorize use of U.S. ground troops in combat.

The S&P 500 has lost 3.3% from its last record on Aug. 2 amid speculation the Fed will scale back its bond buying. There have been signs that the housing recovery has begun to slow as yields on 10-year Treasury notes rose to a two-year high last month. The stimulus helped push the benchmark equity gauge up more than 150% from its March 2009 low.

Citigroup Inc. downgraded U.S. equities to underweight today, saying valuations are “not as attractive as other parts of the world.” The firm upgraded the U.K. and emerging markets. These areas “appear the cheapest major regions across the world,” Tobias Levkovich, Citigroup’s chief U.S. equity strategist, said in a note.

VIX Slips

The Chicago Board Options Exchange Volatility Index, or VIX, slipped 4.1% to 15.93 today. The equity volatility gauge is down 12% this year.

The Stoxx Europe 600 Index rose 0.2%, erasing an earlier 0.7% slide, with gains led by telephone and construction-related companies. A gauge of travel and leisure shares slid 1.6% for the biggest decline among the 19 industry groups in the index. Ryanair Holdings Plc tumbled 11% after Europe’s largest discount airline said full-year profit may fall short of its forecast range amid greater competition on prices and increased capacity. EasyJet Plc, Europe’s second-biggest low-cost airline, slid 5.1%.

ProSiebenSat.1 Media AG retreated 5% after Lavena, a holding company for investments owned by KKR & Co. and Permira Advisers LLP, said it is selling more than 760 million euros of shares in the German broadcaster.

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