Stocks Holding On To Gains Amid Cautious Optimism On Syria - U.S. Commentary

(RTTNews) - While buying interest has waned from earlier in the session, stocks remain mostly positive in mid-day trading on Tuesday. The markets have benefited from a positive reaction to the latest developments regarding the situation in Syria.

The major averages have recently given back some ground but are currently holding on to notable gains. The Dow is up 84.80 points or 0.6 percent at 15,147.92, the Nasdaq is up 16.69 points or 0.5 percent at 3,722.88 and the S&P 500 is up 8.12 points or 0.5 percent at 1,679.83.

The strength on Wall Street comes amid optimism that the crisis regarding the Syrian government's alleged use of chemical weapons could be solved without U.S. military action.

The budding optimism comes amid reports that Syria has accepted a Russian proposal to give up its chemical weapons.

According to Russia's Interfax news agency, Syrian Foreign Minister Walid Moallem told the speaker of the Russian parliament that the Syrian government has agreed to the initiative.

Moallem's remarks were seen as more definitive than a statement on Monday in which he said Syria "welcomes" the Russian proposal.

The Russian proposal calls for Syria to put its chemical weapons stores under international control with plans for their subsequent destruction.

The proposal also calls for Syria to ratify the Chemical Weapons Convention, which outlaws the production, stockpiling, and use of chemical weapons.

In an interview with NBC News on Monday, Obama indicated that the proposal would be a potential breakthrough, although he said he remains skeptical that Syria will follow through.

Another batch of upbeat Chinese economic data has also generated some buying interest on Wall Street after helping to drive the rally on Monday.

Data from the National Bureau of Statistics revealed that industrial production in China increased 10.4 percent year-over-year in August compared with forecasts for 9.9 percent growth.

Chinese retail sales were also up 13.4 percent annually, faster than the 13.3 percent increase expected by economists. This followed the 13.2 percent increase in the previous month.

Among individual stocks, Goldman Sachs (GS), Visa (V), and Nike (NKE) are moving to the upside following news that they will replace Alcoa (AA), Hewlett-Packard (HPQ) and Bank of America (BAC) in the Dow Jones Industrial Average.

Sector News

Airline stocks have moved sharply higher on the day, extending the strong upward move seen over the past two weeks. The NYSE Arca Airline Index has surged up by 2.5 percent and reached a one-month high earlier in the session.

The strength among airline stocks comes as a sharp pullback by the price of crude oil has eased concerns about the outlook for jet fuel prices. Crude for October delivery has tumbled $2.65 to $106.87 a barrel.

Considerable strength has also emerged among semiconductor stocks, as reflected by the 1.5 percent gain being posted by the Philadelphia Semiconductor Index. Strong gains by Micron (MU) and SunEdison (SUNE) have helped lift the index to its best intraday level in well over a month.

Steel stocks are also turning in another strong performance on the day, with the NYSE Arca Steel Index up by 1.4 percent after reaching a nearly six-month intraday high.

Brokerage, software, and defense stocks are also seeing notable strength in mid-day trading, while gold stocks have come under pressure along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Tuesday. Japan's Nikkei 225 Index jumped by 1.5 percent, while Hong Kong's Hang Seng Index advanced by 1 percent.

The major European markets also showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.8 percent, the French CAC 40 Index and the German DAX Index surged up by 1.9 percent and 2.1 percent, respectively.

In the bond market, treasuries are seeing moderate weakness amid the easing concerns about Syria. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.3 basis points at 2.94 percent.