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Business & Technology

Stocks mostly higher as Syria strike fears fade

September 3rd, 2013 1:02 pm by CARLO PIOVANO, Associated Press; PAMELA SAMPSON, Associated Press

Stocks mostly higher as Syria strike fears fade

LONDON (AP) — Stock markets mostly advanced Tuesday thanks to the fading likelihood of an imminent U.S.-led attack against Syria and an increase in corporate deal-making. European shares underperformed, however, a day after posting strong gains.

President Barack Obama has faced difficulty trying to amass support for U.S. military intervention in Syria, where an alleged chemical attack by government forces killed scores of civilians outside of Damascus. Britain's parliament voted against involvement, and Russia and China have been critical of the idea.

Obama announced over the weekend that he would seek approval from Congress for military strikes, but he faced skepticism among many U.S. lawmakers about the intelligence regarding the chemical attack and the value of an intervention to U.S. interests.

"To be sure, a Syria strike no longer being imminent is reason for relief but that does not mean that Syria has dropped off the geo-politics radar," said Vishnu Varathan of Mizuho Bank Ltd. in Singapore.

After surging the day before, European markets were steady or slightly lower. Britain's FTSE 100 closed down Tuesday 0.58 percent to 6,468.41, while Germany's DAX fell 0.77 percent to 8,180.71. France's CAC-40 shed 0.8 percent to 3,974.07.

Sentiment has been shored up by an increase in corporate deal-making, which shows confidence in the global economy is recovering. After Verizon agreed Monday to buy out the remaining stake in its mobile phone business from Vodafone in a massive, $130 billion deal, Microsoft announced it would take over Nokia's phone unit.

Nokia shares closed up 34 percent in Helsinki on the news that Microsoft will pay $7.2 billion to buy the Finnish company's business, which had until recently been the biggest seller of mobile phones in the world.

Wall Street opened higher after a three-day holiday weekend and more upbeat economic indicators. A survey showed U.S. manufacturing grew at the fastest pace in more than two years in August as new orders rose. The Dow Jones industrial average was barely changed, down 0.04 percent at 14,803.14 while the S&P 500 rose 0.3 percent to 1,637.23.

Earlier, Asian stocks advanced on the heels of two reports, released Monday, that showed China's manufacturing sector improved last month after prolonged weakness.

The HSBC purchasing managers' index rose to 50.1 points in August, a level that indicates expansion as output and new orders edged up slightly and order backlogs rose at the fastest pace in two years. The official China Federation of Logistics and Purchasing PMI rose to 51.0 from July's 50.3, which was the highest level in 16 months.

Both indexes use a 100-point scale on which numbers below 50 indicate a contraction.

Japan's Nikkei 225 index jumped 3 percent to 13,978.44. South Korea's Kospi rose 0.5 percent to 1,933.74. Australia's S&P ASX/200 added 0.2 percent to 5,196.60. Hong Kong's Hang Seng advanced 1 percent to 22,394.58.

Benchmark crude for October delivery was up 74 cents to $108.38 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.15 to close at $107.65 on Friday.

In currencies, the euro fell to $1.3164 from $1.3187 late Monday. The dollar was down slightly to 99.36 yen from 99.56 yen.


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