Wall Street up but rally fizzles on support for Syria strike

Traders work on the floor of the New York Stock Exchange September 3, 2013. REUTERS/Brendan McDermid

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks rose on Tuesday but were far off session highs after top Republicans voiced support for U.S. President Barack Obama's call for military strikes against Syria.

The S&P 500 rose more than 1 percent in early trading after Obama sought congressional authorization before taking military action, a move seen likely to shelve any strike for at least several days. The S&P fell 1.8 percent last week mainly on uncertainty over what appeared to be an imminent strike.

John Boehner, the top-ranking Republican in the U.S. House of Representatives, and House Majority Leader Eric Cantor pledged on Tuesday their support for military action against Syria to punish President Bashar al-Assad for his suspected use of chemical weapons against civilians.

Congress returns from its summer recess on September 9, and any vote to authorize a strike will come after that.

"People still see uncertainty in Syria and want a decision one way or another. Until we see something more definitive we can see rallies continue to be questionable and a lot of selling pressure," said J.J. Kinahan, chief strategist at TD Ameritrade in Chicago.

The Dow Jones industrial average rose 23.65 points or 0.16 percent, to 14,833.96, the S&P 500 gained 6.8 points or 0.42 percent, to 1,639.77 and the Nasdaq Composite added 22.743 points or 0.63 percent, to 3,612.612.

The market found support also from stronger-than-expected data on U.S. manufacturing and construction spending that hinted the world's biggest economy was gaining traction.

Brent crude oil futures rose 1.2 percent on supply concerns on the increased support for a strike on Syria, and on improving economic data in the United States and China. U.S. crude futures rose 0.8 percent.

Nokia Corp (NYS:NOK - News) agreed to sell its handset business to Microsoft Corp (NSQ:MSFT - News) for $7.2 billion, sending its U.S. shares up 31.3 percent to $5.12 on record volume. Microsoft fell 4.6 percent to $31.88 and was the biggest drag on all major indexes.

Verizon Communications (NYS:VZ - News) agreed on Monday to pay $130 billion to buy Vodafone Group (LSE:VOD.L - News)(VOD.O) out of its U.S. wireless business, ending an often tense 14-year marriage. Verizon lost 2.9 percent to $46.01 while U.S. shares of Vodafone shed 1.1 percent to $32.01.

CBS Corp (NYS:CBS - News) on Monday reached an agreement with Time Warner Cable Inc (NYS:TWC - News) to end a month-long blackout of its stations in New York, Los Angeles and Dallas. Financial terms of the deal were not disclosed. Shares of CBS rose 4.7 percent to $53.50 while Time Warner Cable added 1.8 percent to $109.25.

About 6.6 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, more than the daily average so far this year of about 6.26 billion shares. On the NYSE, 1,626 issues rose while 1,353 fell and on Nasdaq advancers beat decliners by a ratio of about 9 to 5.

(Additional reporting by David Gaffen; Editing by James Dalgleish)