Sun, Sep 15, 2013 - Page 15 News List

US indices surge as Syria anxiety ebbs, deals made

AFP, NEW YORK

It was a busy week of business news in the US, which included a record bond offering, an Apple Inc product launch and even some substantial tinkering with the hallowed Dow Jones Industrial Average.

However, US markets were most influenced by what did not happen: a US military strike against Syria.

Markets had been shadowed in recent weeks by fear of a Washington-led attack on Syria, but US stocks rallied this week as Western leaders back-burnered plans for a strike in response to a Russian proposal to put Syria’s chemical weapons under international control.

The Dow Jones Industrial Average jumped 453.56 (3.04 percent) to 15,376.06, its strongest rally since January, while the broad-based S&P 500 tacked on 32.82 (1.98 percent) at 1,687.99 and the tech-rich NASDAQ Composite Index rose 62.17 (1.70 percent) to 3,722.18.

Markets eagerly awaited the US Federal Reserve’s two-day policy meeting starting on Tuesday. The Federal Open Market Committee is widely expected to announce the first reduction in the Fed’s US$85 billion-a-month bond-buying program.

Perhaps the week’s biggest highlight was Verizon Communications Inc’s successful US$49 billion bond sale, which smashed the US$17 billion all-time record set by Apple in April. The funds will help finance Verizon’s US$130 billion purchase of Vodafone Group PLC’s stake in their Verizon Wireless joint venture.

Underwriters for the massive deal doubled the size from initial plans in response to heavy demand. Investors ate up the relatively generous coupon, which included a 5.185 percent yield on 10-year bonds.

Dell Inc shareholders finally endorsed a proposal to go private after activist Carl Icahn ended his challenge to founder Michael Dell’s leveraged buyout. Dell will now attempt to boost its service and software businesses to make up for a declining personal computer business.

Twitter Inc announced in a tweet that it has submitted papers for the most hotly anticipated initial stock offering (IPO) in the tech sector since Facebook Inc’s IPO last year.

Dow index owner S&P Dow Jones Indices said that it is replacing three stocks in the 30-company index with stocks that had higher value or provided more market diversity. The dropped companies — Bank of America Corp, Hewlett-Packard Co and Alcoa Inc — will be replaced by Goldman Sachs, Visa Inc and Nike Inc on Sept. 23.

The buzz generated by Verizon and others helped offset Apple’s disappointing launch of two iPhone models. Analysts faulted the lower-priced iPhone 5C as still too costlyfor emerging markets and were disappointed at the lack of a long-awaited deal with China Mobile Ltd (中國移動). Apple shares shed more than 8 percent after the Tuesday launch to close the week at US$464.90.

The week ahead features reports on industrial production (tomorrow), housing starts (Wednesday) and existing-home sales (Thursday).

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