U.S. stocks fall amid tension, consumer confidence report
DESPITE AN UNEXPECTED RISE IN CONSUMER CONFIDENCE, U.S. equities at the New York Stock Exchange fell Tuesday morning on worries over potential military action in Syria by the United States in relation to the alleged use of chemical weapons there.
BLOOMBERG NEWS FILE PHOTO/JIN LEE
By Inyoung Hwang and Nick Taborek Bloomberg News
NEW YORK - U.S. stocks fell, with the Standard & Poor’s 500 Index sliding for a second day, as growing tension over possible military action in Syria overshadowed a report showing consumer confidence unexpectedly rose in August.
All 10 groups in the benchmark equity gauge dropped. American Express Co. lost 1.3 percent to pace declines among financial companies. Barrick Gold Corp. surged 2.4 percent as the precious metal’s price rallied amid the turmoil in the Middle East.
The S&P 500 slid 0.8 percent to 1,643.45 at 10:04 a.m. in New York. The Dow Jones Industrial Average dropped 79.13 points, or 0.5 percent, to 14,867.33, headed for its eighth decline in 10 sessions.
“Everybody’s waiting to see what’s going to happen,” Randy Bateman, who oversees $15 billion as chief investment officer of Huntington Asset Advisors in Columbus, Ohio, said by phone. “Is this going to escalate? Energy prices, if they rise a whole lot, could that mitigate all the strength we’ve been seeing lately in the economy? If we’ve got housing prices that start to rise at the same time we have food and fuel increasing, we could see inflation start to rise and that could impact Fed policy.”
The benchmark gauge fell 0.4 percent yesterday, reversing an early gain of as much as 0.4 percent after Secretary of State John Kerry said the United States will hold Syria’s government accountable for using chemical weapons, fanning concern unrest may disrupt Middle East oil supplies.
President Barack Obama is under growing pressure from U.S. allies and Congress to go beyond denunciations of Syria and take military action after the Aug. 21 attack that opposition groups say killed more than 1,300 people. Iran’s Foreign Ministry warned that a U.S. attack on Syria would drag the whole region into conflict.
Investors are also watching the political wrangling over the approaching limit on federal spending. The U.S. government is expected to exhaust its ability to borrow funds in mid-October, when it will hit the statutory debt limit, according to an estimate from the Treasury Department in a letter to lawmakers released Monday.
“It further adds to the degree of uncertainty that’s out there,” Bateman said.
Treasury Secretary Jacob J. Lew reiterated today that the Obama administration won’t negotiate over the debt limit, saying he thinks lawmakers understand the need to preserve the U.S.’s “rock-solid” pledge to meet its commitments.
House Speaker John Boehner said last month Republicans wouldn’t increase the debt ceiling “without real cuts in spending” that would achieve a further reduction in the deficit.