Based on today’s economic data, you would certainly have expected a more robust rally than what the broad-based S&P 500 (INDEXSP:.INX) ended up gaining, but beggars can’t be choosers when the threat of war with Syria is on the table.
Specifically, two pieces of U.S. economic data helped to give the S&P 500 (INDEXSP:.INX) an early morning lift. First, the U.S. ISM manufacturing index for August rose to 55.7%, which was dramatically higher than Wall Street’s expectations and its fastest expansion in two years. Any level over 50 signals expansion of the manufacturing sector, and August’s reading would certainly bode well for the U.S. economy and jobs growth forecasts.
In addition to fantastic manufacturing news, construction spending ticked higher by 0.6% — also higher than forecast — and would point to ongoing strength in personal and commercial construction.
The big question mark, though, for the S&P 500 (INDEXSP:.INX) remains Syria. With the majority of Republicans favoring what looks to be a militaristic response against Syria, and President Obama announcing his clear intentions for militaristic action, investors worry that strikes against Syria could complicate the United States’ relationship with numerous Middle East nations and some of its trading partners. The truly unfortunate aspect of this debate is we probably won’t have any resolution until after Congress reconvenes, which is still a week away.
Giving up its robust early gains, the S&P 500 (INDEXSP:.INX)ended higher by 6.80 points (0.42%) to finish at 1,639.77.
Topping the charts within the S&P 500 (INDEXSP:.INX) today is biotech behemoth Regeneron Pharmaceuticals Inc (NASDAQ:REGN), which added 7% despite no company-specific news today. There was, however, quite a bit of good news for shareholders to bite into at the end of last week, including the EU approval for Eylea, Regeneron’s lead drug, for the treatment of macular edema secondary to central retinal vein occlusion. Following this approval, RBC Capital Markets put out positive commentary that it expected Regeneron’s share price to appreciate with Eylea’s sales growth. With Eylea projected to grow by north of 20% over the next two years, Regeneron’s run may be nowhere near done.
Media giant CBS Corporation (NYSE:CBS) advanced 4.7% after finally coming to an agreement with Time Warner Cable Inc (NYSE:TWC), which restores CBS coverage for Time Warner cable customers in Los Angeles, New York City, and Dallas just days before the NFL season kicks off. The spat originated on Aug. 2 and stems from a disagreement between the media giants over retransmission fees. With both sides meeting in the middle, it now allows for CBS to again collect retransmission fees from Time Warner while also allowing Time Warner to pay lower fees than was the case in the original agreement before the blackout began. With CBS pretty much in the clear, Time Warner had better hope it didn’t tick off too many of its current customers, but only time will tell whether that’s the case.
