Adam Sarhan Reuters Quote: US STOCKS-Futures climb as potential Syria action delayed

ReutersTue Sep 3, 2013 8:05am EDT

* Obama to seek congressional authorization forSyria action

* Verizon falls in premarket, agrees to a deal with Vodafone

Nokia ADRs soar in premarket on deal with Microsoft

Futures up: Dow 105 pts, S&P 13 pts, Nasdaq 22.75 pts

By Ryan Vlastelica

NEW YORK, Sept 3 (Reuters) – U.S. stock index futures jumped on Tuesday after U.S. President Barack Obama opted to seek congressional authorization for military action against Syria, a move that was likely to delay any strike for at least several days.

Equities have recently been pressured by the prospect of a Western strike against Syria after chemical weapons were used to kill civilians. The geopolitical uncertainty contributed to steep losses in August, which marked the worst month for the S&P 500 since May 2012.

Congress returns from its summer recess on Sept. 9, and any vote to authorize a strike will come after that. While Obama has been pushing Congress to back his plan, passage is by no means certain, further easing concerns over an imminent strike.

“There was tremendous fear going into the weekend that the worst-case scenario, some kind of military action, would occur. Now the market is breathing a sigh of relief,” said Adam Sarhan, chief executive of Sarhan Capital in New York.

U.S. crude futures dipped 0.4 percent. Oil spiked 2.5 percent in August, with the increase largely driven by concerns that military action in the Middle East would impact crude supplies.

“It isn’t as though the threat has gone away, but the fall in oil prices is helping to alleviate pressure,” Sarhan said.

Verizon Communications agreed on Monday to pay $130 billion to buy Vodafone Group out of its U.S. wireless business, bringing an end to an often tense 14-year marriage.

Shares of Verizon, a Dow component, fell 4.8 percent to $45.10 in premarket trading while U.S. shares of Vodafone lost 1.5 percent to $31.87.

Also in deal news, Nokia Corp agreed to sell its handset business to Microsoft Corp for $7.2 billion, sending its U.S. shares up 42 percent to $5.54 before the bell. Microsoft fell 4 percent to $32.08.

S&P 500 futures rose 13 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 105 points and Nasdaq 100 futures rose 22.75 points.

The U.S. stock market was closed on Monday for Labor Day and trading volume could continue its recent trend of being light with many traders away for the holiday.

In the S&P, investors will be watching the 100-day moving average at 1,639.42, which the index has been unable to close above since Aug. 26. Holding over that level would be a positive sign of near-term momentum.

While the uncertainty related to Syria has been the market’s primary driver in recent sessions, investors will also pay close attention to the latest economic data, which could provide some insight into when the U.S. Federal Reserve will begin to slow its monetary stimulus program.

The Institute for Supply Management’s August manufacturing sector data is due at 10 a.m. (1400 GMT) with analysts expecting the main index to fall to 54 from 55.4 last month. July construction spending is also scheduled for release at 10 a.m., and is seen rising 0.3 percent.

Shares of J.C. Penney Co rose 2.6 percent to $12.80 in premarket trading after Hayman Capital reported a 5.2 percent passive stake in the retailer.

CBS Corp on Monday reached an agreement with Time Warner Cable Inc to end a month-long blackout of its stations in New York, Los Angeles and Dallas. Financial terms of the deal were not disclosed.

H&R Block is the only S&P 500 company scheduled to report quarterly results on Tuesday.

Wall Street stocks have been coming off an extended period of weakness, with all three major indexes falling more than 1 percent last week and notching steep losses in August.

Source: http://www.reuters.com/article/2013/09/03/markets-usa-stocks-idUSL2N0GZ0BY20130903

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