Wall Street up as expectations of broader conflict in Syria recede
New York — Wall Street rose while oil and government bond prices fell on Monday on the view that last weekend’s US-led missile strikes on Syria were unlikely to mark the start of a broader conflict.
Saturday’s strikes marked the biggest intervention by Western countries against Syrian President Bashar al-Assad and his ally Russia, which is facing further economic sanctions over its role in the conflict.
"There is a feeling [in the market] that there will be no follow-up action," Rabobank fixed income analyst Lyn Graham-Taylor said.
The Dow Jones Industrial Average rose 190.35 points, or 0.78%, to 24,550.49, the S&P 500 gained 16.89 points, or 0.64%, to 2,673.19 and the Nasdaq Composite added 29.31 points, or 0.41%, to 7,135.96.
"The action was well-received … and that’s giving a chance for investors to focus on macro news and earnings," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Healthcare shares also rose after positive updates on a cancer drug from Merck.
Hopes that the strike against Syria would not escalate further also spurred investors to shed the US dollar.
The dollar index fell 0.3%, with the euro up 0.28% to $1.2364.
European shares eased, however, adding to a mixed picture from Asian stock markets and suggesting that a degree of caution prevails.
The pan-European FTSEurofirst 300 index lost 0.41%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.5% lower, as Chinese blue-chips skidded 1.6%. MSCI’s gauge of stocks across the globe, which tracks shares in 47 countries, gained 0.30%. European and US government bond yields, which move inversely to prices, rose across the board. That was partly as attention turned to what is expected to be a robust first-quarter US corporate earnings season, which begins in earnest this week.
The yields on German and US government bonds, among the most liquid and safe assets in the world, were at their highest levels in nearly two weeks and four weeks, respectively.
Benchmark 10-year notes last fell 5/32 in price to yield 2.8469%, from 2.828% late on Friday.
The 30-year bond last fell 7/32 in price to yield 3.0463%, from 3.036%. Some other traditional safe-haven bets held firmer, with gold and Japan’s yen edging higher.
Dealers were keeping a wary eye on Japanese politics after a survey showed support for Prime Minister Shinzo Abe had fallen to 26.7%, the lowest since he took office in late 2012.
Even so, Japan’s Nikkei rose 0.26%.
Oil prices, meanwhile, recouped some losses after falling sharply. Brent crude was last at $71.78, down 1.1% on the day, with a rise in US drilling for new production also dragging on prices.
US crude fell 1.34% to $66.49 a barrel.