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Global Market Wrap-Up - August 26, 2013

Monday, August 26, 2013
Mark Hanna
U.S. stocks initially rallied Monday as a return of "bad news is good news" took over the market, but sold off later in the day on geopolitical concerns. Premarket a poor durable goods order report was released - the market liked that as it meant it was less likely the Federal Reserve would back off on supporting the market at full tilt soon. Stocks were solidly in the green across the board; however late in the afternoon comments from Defense Secretary Kerry on the use of chemical weapons in Syria caused a sharp selloff, from which stocks did not recover. With the S&P 500 this led to a 0.4% loss while the NASDAQ closed down fractionally. U.S. Treasuries rallied on the bad economic data, pushing yields down to 2.79%.
  • Orders for long-lasting U.S. manufactured goods recorded their biggest drop in nearly a year in July and a gauge of planned business spending on capital goods tumbled. The Commerce Department said durable goods orders dropped 7.3% as demand for goods ranging from aircraft to computers and defense equipment fell. That was the biggest decline since last August and snapped three consecutive months of gains. Economists polled by Reuters had expected durable goods orders to fall 4.0%.
  • Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 3.3 percent, breaking four straight months of gains. It was the biggest fall since February.
The debt ceiling also came back in the limelight as it was reported the debt ceiling would be reached by mid October.

  Oil fell 0.5% to $105.92 and gold dropped 0.2% to $1393.10. Silver gained 1.15% to $24.01.

The FTSE was closed Monday, while German stocks gained 0.2% and French stocks fell 0.1%.

Japan fell 0.2%, while China jumped 1.9%.