Markets mixed as Syria fears ease

North American stock markets were mostly down Wednesday with little on the economic calendar as the focus continued to stay on any unfolding developments regarding Syria.The S&P/TSX composite index was down 41.22 points to 12,783.26 at midmorning. The Canadian dollar was up 0.09 of a cent to 96.73 cents US.The financial markets have settled down somewhat since President Barack Obama said the United States will back down from a military strike on Syria, after the Middle Eastern country agreed to a Russian proposal to hand over its chemical weapons. In a televised address late Tuesday, Obama said the American military will continue to stay prepared to attack if Syria reneges on its promise.The development followed weeks of tensions after the U.S. threatened military action against Syria for an alleged sarin gas attack on Aug. 21 that killed 1,429 people in a Damascus suburb. Syria has denied it was responsible.With Damascus indicating its support for the Russian plan, investors have largely breathed a sigh of relief that a strike and all the possible regional repercussions may be averted.Geopolitical uncertainties, particularly when related to the oil-rich Middle East, are rarely conducive to risk-taking in the investing community.U.S. indexes were mixed as the Dow Jones industrial index surged 44.19 points to 15,235.25, the Nasdaq was down 17.87 points to 3,711.15 and the S&P 500 fell 2.98 points to 1,681.01.Analysts don’t expect much movement on Wall Street until next week’s two-day meeting of the Federal Reserve, where they will decide if they will begin to roll back their $85-billion monthly bond purchases.Some believe there may be some changes to the quantities easing policy, which has buoyed the markets, but Derek Holt of Scotiabank said no one is expecting any drastic announcements.“Part of the debate is how much and when,” said Holt, vice-president of economics at the bank. “We’ve always been in the camp that they do so later for various reasons. I don’t think they need to rush to cut back purchases now because their concerns about froth in financial markets have dissipated somewhat.”Holt said this is supported by recent data from the U.S. that showed the economy is not doing as well as expected.“The bigger issue is we’ve seen some weak data on the U.S. economy going into the third quarter with the falling home sales, the falling durable goods orders, weak employment report with the downward revisions,” he said.“The general point is the data is suggesting that the economy is responding negatively to higher interest rates so that might make the Fed a little bit nervous about pulling back on stimulus just yet.”On the Toronto stock exchange, nearly all sectors were down with the materials, gold and metals and mining sectors sustaining most of the losses.Geopolitical uncertainty remains the main driver in oil markets in particular, which have been falling amid easing of tensions surrounding Syria. Although Syria isn’t a major producer, political uncertainty in the oil-rich Mideast tends to push up crude prices.The October crude contract fell four cents to US$107.35. December bullion fell $2.90 to US$1,361.10 an ounce, while December copper got ahead a penny to US$3.27 a pound.In corporate news, discount retailer Dollarama (TSX:DOL) beat analyst expectations as its second-quarter profit surged 20 per cent to $59.8 million despite slightly lower margins caused by its expansion.The Montreal-based retailer, which has more than 800 stores focused on items sold for between $1 and $3 each, earned 82 cents per share for the period ended Aug. 4, up from 66 cents per diluted share a year ago. Sales increased 16 per cent to $511.3 million.Estimates compiled by Thomson Reuters called for $503.7 million of revenue and 79 cents per share of net income, or 78 cents per share on an adjusted basis. Its shares jumped more than seven per cent to $79.58.Overseas, in Europe, the FTSE 100 index of leading British shares was down 15.19 points to 6,569.22, Germany’s DAX was up 29.70 points to 8,476.24. The CAC-40 was 12.57 points lower at 4,104.07.Earlier in Asia, the Nikkei 225 index, the regional heavyweight, shed early gains to flatten out at 14,425.07 points while China’s benchmark Shanghai Composite Index gained 0.2 per cent to 2,241.27. Hong Kong’s Hang Seng fell 0.2 per cent to 22,937.14 and South Korea’s Kospi rose 0.5 per cent to 2,003.85.

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