Based on today's economic data, you would certainly have expected a more robust rally than what the broad-based S&P 500 ended up gaining, but beggars can't be choosers when the threat of war with Syria is on the table.
Specifically, two pieces of U.S. economic data helped to give the S&P 500 an early morning lift. First, the U.S. ISM manufacturing index for August rose to 55.7%, which was dramatically higher than Wall Street's expectations and its fastest expansion in two years. Any level over 50 signals expansion of the manufacturing sector, and August's reading would certainly bode well for the U.S. economy and jobs growth forecasts.
In addition to fantastic manufacturing news, construction spending ticked higher by 0.6% -- also higher than forecast -- and would point to ongoing strength in personal and commercial construction.
The big question mark, though, for the S&P 500 remains Syria. With the majority of Republicans favoring what looks to be a militaristic response against Syria, and President Obama announcing his clear intentions for militaristic action, investors worry that strikes against Syria could complicate the United States' relationship with numerous Middle East nations and some of its trading partners. The truly unfortunate aspect of this debate is we probably won't have any resolution until after Congress reconvenes, which is still a week away.
Giving up its robust early gains, the S&P 500 ended higher by 6.80 points (0.42%) to finish at 1,639.77.
Topping the charts within the S&P 500 today is biotech behemoth Regeneron Pharmaceuticals , which added 7% despite no company-specific news today. There was, however, quite a bit of good news for shareholders to bite into at the end of last week, including the EU approval for Eylea, Regeneron's lead drug, for the treatment of macular edema secondary to central retinal vein occlusion. Following this approval, RBC Capital Markets put out positive commentary that it expected Regeneron's share price to appreciate with Eylea's sales growth. With Eylea projected to grow by north of 20% over the next two years, Regeneron's run may be nowhere near done.
Media giant CBS advanced 4.7% after finallycoming to an agreement with Time Warner Cable , which restores CBS coverage for Time Warner cable customers in Los Angeles, New York City, and Dallas just days before the NFL season kicks off. The spat originated on Aug. 2 and stems from a disagreement between the media giants over retransmission fees. With both sides meeting in the middle, it now allows for CBS to again collect retransmission fees from Time Warner while also allowing Time Warner to pay lower fees than was the case in the original agreement before the blackout began. With CBS pretty much in the clear, Time Warner had better hope it didn't tick off too many of its current customers, but only time will tell whether that's the case.
Finally, Biogen Idec saw its shares zoom higher by 4.1% following positive commentary from UBS as noted by Barron's. Although UBS only went so far as to give a neutral view of Biogen Idec, the research firm did note that large-cap biotechnology stocks look to be in better shape than small-cap biotechs, and they remain one of the few sectors within the global equity markets that look poised for growth in the interim. The acquisition of Tysabri's global rights from Elan, as well as the approval of game-changing relapsing multiple sclerosis pill, Tecfidera, certainly gives shareholders hope that Biogen has plenty of pep left in its step.
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