Markets Rebound as Syria Jitters Ease
Indications that a U.S.-led military intervention in Syria may not be happening imminently allowed investors to regroup Thursday, helping to shore up stock markets. Commodities, such as oil and gold, drifted lower after racing ahead in the first half of the week as worries over an attack escalated.
However, the prospect of an immediate multinational response appears to have diminished, with President Barack Obama giving the impression Wednesday that he had not yet decided to back a military strike.
The U.K. government also backed down on a parliamentary vote to authorize British participation in any strike against Syria until UN inspectors reveal their findings on the apparent chemical attack in the suburbs of Damascus that has been blamed on the government of President Bashar Assad. The report is expected within a week.
"What seems like a delay in U.S. and allied military action in Syria is providing temporary relief for the equity markets that endured weakness earlier in the week," said Neil MacKinnon, global macro strategist at VTB Capital.
In Europe, the FTSE 100 index of leading British shares closed up 0.8 percent at 6,483 while Germany’s DAX was 0.45 percent higher at 8,194. The CAC-40 in France was 0.7 percent higher at 3,986.
In the U.S., the Dow Jones industrial average was up 0.5 percent at 14,895 while the broader S&P 500 index rose 0.6 percent to 1,644.
An upward revision to second-quarter U.S. economic growth to an annualized rate of 2.5 percent from the previous estimate of 1.7 percent had little impact on trading as it was largely due to an improvement in the country’s trade balance - there were more exports relative to imports than previously thought.
Up until this week, the main focus of attention through the summer months has been whether the Federal Reserve will start to reduce its monetary stimulus as soon as next months. A run of largely solid economic figures had raised the likelihood of that happening but recently the data have been a little bit more mixed.