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Boosted by strong reports from automakers and easing fears about Syria, the Dow Jones Industrial Average (^DJI 0.09%) finished up 97 points or 0.7% today.
President Obama spoke in Stockholm today, insisting that the "red line" on chemical weapons was created by the world, not the United States, as he tried to drum up foreign support for a limited strike against the Syrian regime. Meanwhile, the Senate Foreign Relations approved a restricted attack against Syria, by a vote of 10-7, stipulating that no ground troops would be allowed, and the strikes would be limited to 60 days. Markets seemed to react well to the idea of a contained strike.
Back at home, carmakers reported strong August sales as Ford (F 3.14%) and General Motors (GM 4.16%) jumped 3.5% and 5% respectively, and all of the "Big 3" reported double-digit year-over-year increase. GM saw its best month since before the financial crisis, and the reports, which are the earliest indicator of August spending, indicate that consumer demand continues to be strong as vehicles make up about 25% of retail sales. In other economic news, the July trade deficit expanded to $39.1 billion, above expectations of $38.2 billion, and the Federal Reserve's Beige Book economic assessment showed moderate growth in most of the country with consumer spending and the housing market improving.
Microsoft (MSFT -0.92%) was the worst performer on the Dow for the second day in a row, falling 2.2% after receiving a downgrade from Morgan Stanley following its purchase of Nokia's handset division. The investment bank dropped its rating on Microsoft to hold, saying executing the handset integration may be difficult. Microsoft hopes to reach 15% market share in the smartphone industry by 2018, up from 5% today, which could prove difficult, as there are a number of better-positioned competitors and the industry is maturing, meaning major innovations are likely to be less frequent.
Fellow tech heavyweight, Intel (INTC -0.03%) was the Dow's biggest gainer today, moving up 2.6%, after it introduced a new chip, which it calls the Avoton, for microservers. Intel claims the chips run six times faster than its predecessors, and with the company struggling for a foothold as PC sales decline, investors were happy to see it homing in a new microserver market.