U.S. stocks advance on Chinese economy, optimism over Syria

Fed Meeting

The Fed is watching economic data ahead of its Sept. 17-18 meeting as it considers reducing its monthly $85 billion in asset buying. The S&P 500 has rallied as much as 153% since the beginning of the bull market in March 2009 as the central bank continued to provide stimulus to the economy.

Economists estimate the Fed this month will taper its monthly bond buying by $10 billion, to $75 billion, according to the median of 34 responses in a Bloomberg News survey.

The Chicago Board Options Exchange Volatility Index, or VIX, dropped 5.3% to 14.81. The equity volatility gauge is down 13% in September after rallying 26% in August, the biggest monthly gain since May 2012.

The Dow Jones Transportation Index jumped 1.6% to the highest level in a month. Shares in companies whose earnings are most closely tied to economic growth rose, sending the Morgan Stanley Cyclical Index up 1.5% to the highest level since the gauge started in 1978. Financial and industrial shares rallied the most among 10 groups in the S&P 500, adding at least 1%.

General Electric Co. advanced 2.2% to $23.90 for the biggest gain in the Dow. Microsoft Corp. climbed 1.9% to $32.26, United Technologies Corp., the maker of Pratt & Whitney jet engines and Sikorsky helicopters, increased 1.5% to $106.07.

Dow Members

Goldman Sachs climbed 3.5% to $165.14. Nike jumped 1.6% to $66.47 and Visa increased 2.9% to $183.72. Hewlett-Packard lost 0.7% to $22.20. Alcoa slipped 0.3% to $8.06. Bank of America added 1.1% to $14.64.

The changes to the Dow, announced by S&P Dow Jones Indices, will take place after the close of the market on Sept. 20, and will be the first reshuffling of the gauge since September 2012.

McDonald’s climbed 0.4% to $96.84. The world’s largest restaurant chain said same-store sales increased 1.9% last month, helped by demand in Europe. Analysts projected a 0.3% increase, the average of 16 estimates from Consensus Metrix. McDonald’s said it benefited from demand in France and Russia as well as the introduction of blended-ice beverages in the U.K.

Apple Presentation

E*Trade Financial Corp. soared 4.2% to $17.21, the highest level since February 2011. The online brokerage said its daily average revenue-generating trades rose 5% in August compared to the previous month and the stock was upgraded to outperform from neutral at Macquarie Group Ltd.

Apple tumbled 1.9% to $496.34. The company unveiled a cheaper $99 version of the iPhone in bright colors and an updated high-end device, in a strategy shift by Chief Executive Officer Tim Cook to reach a broader range of customers around the world as competing devices running Google Inc.’s Android software gain in popularity.

“The competition has caught up and it’s now purely about how quickly it can innovate and drive its own experience forward,” said Benedict Evans, an analyst with Enders Analysis in London.

Apple also said it was adding Japan’s largest carrier, NTT DoCoMo Inc., and that it would have devices available upon introduction in China for the first time. The company is near a deal with China Mobile Ltd., the world’s largest carrier, people familiar with the plans have said.

Urban Outfitters Inc. fell the most in the S&P 500, losing 9.6% to $38.63. The teen-clothing retailer said third- quarter comparable sales so far are growing at a mid-single- digit pace. Janney Montgomery Scott LLC last week estimated the company would report that the sales were running at a “high- single digit” rate.


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