Dow Jones Industrials Gain 135 Points; S&P 500 Extends Perfect September

Make that seven days.

REUTERS

The S&P 500 gained 0.3% to 1,689.13 today, making it a perfect 7 and 0 in September. The Dow Jones Industrials, meanwhile, rose 135. 54 points, or 0.9% to 15,326.60. The Nasdaq Composite, however, edged 0.1% lower today thanks to the 5.4% drop in that behemoth known as Apple (AAPL).

Why the market strength? Well, the U.S. is seeking a diplomatic solution to the Syria problem, at least for the time being, and investors may be coming to believe that tapering, when it happens, is already reflected in the market. With those worries behind them, investors can let their animal spirits soar.

Or maybe not. S&P Capital IQ’s Alec Young, for one, believes Syria could be trouble. He writes:

While the odds of a U.S. military strike on Syria may have edged down contingent on a timely accounting and handover of their chemical weapons stockpiles, we believe it would be naïve to think a strike is now unlikely given the still significant odds of Syrian non-compliance. And given that the S&P 500 is now slightly above where it was when the Syrian situation escalated on August 26, we believe equities remain vulnerable to further knee-jerk selling at the first sign of Al-Assad’s non-cooperation, at which point we’d expect stocks to quickly discount an attack. That said, we believe that were a strike to occur, it would be unlikely to lead to a wider Mideast military conflagration, making any equity weakness it precipitated a potential buying opportunity.

And while everyone seems to feel that tapering is priced in, there’s always room for a surprise. But we’ll enjoy this rally for now.

Kinder Morgan (KMI) fell 2.8% to $36.01 today, one day after Hedgeye released its report on the company.

PVH (PVH) dropped 1.5% to $22.80, a day after falling 5.6% on disappointing earnings, after a Citigroup analyst said its no longer one of her top picks.

Phillip Morris (PM) gained 2.8% to $86.56 after boosting its dividend by 10.6%.

Restoration Hardware (RH) dropped 12% to $68.04 despite what many considered to be a solid earnings report. Not Barron’s.