U.S. stocks drop as U.S.-Syrian conflict fears brew; Dow down 1.14%

U.S. stocks drop as U.S.-Syrian conflict fears brew; Dow down 1.14%

Submitted by caseyb23 on Wed, 08/28/2013 - 03:12

U.S. stocks drop as U.S.-Syrian conflict fears brew; Dow down 1.14%

Investing.com – U.S. stocks fell on Tuesday after fears began to grow that the U.S. is moving closer to launching military strikes against Syria and fan broader geopolitical tensions that could roil markets down the road.

Trading volumes were thin to moderate.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 1.14%, the S&P 500 index fell 1.59%, while the Nasdaq Composite index dropped 2.16%.

Syria's alleged use of chemical weapons in its internal conflict repelled investors away from stocks and into the safety of the yen and gold as the possibility of U.S. military strikes appeared to be on the rise.

U.S. Defense Secretary Chuck Hagel said earlier the military is ready to take action against Syria if called upon by the White House.

The U.S. insists Syrian security forces have used chemical weapons during its internal conflict as have the U.K. and others, a charge Damascus has denied.

On Monday, U.S. Secretary of State John Kerry said the world would hold Syria accountable for using chemical weapons.

Russia and China, meanwhile, have warned against strikes against Syria, while Iran has said a U.S. attack would embroil the oil-rich region in conflict.

Elsewhere, the Conference Board said its index of consumer confidence rose to 81.5 in August from an upwardly revised 81.0 in July. Analysts had expected the index to fall to 79.0.

Also in the U.S., the S&P/Case Shiller composite index of 20 metropolitan areas rose 12.1% on year in June, in line with market expectations.

While uncertainty still remains as to when the Federal Reserve will begin tapering the pace of its USD85 billion in monthly bond purchases, which could erode short-term support for stocks, monetary murkiness took a back seat to fears of a military conflict between the U.S. and Syria on Tuesday.

Leading Dow Jones Industrial Average performers included Coca-Cola, up 0.08%, Chevron, up 0.03%, and Verizon, which was unchanged.

The Dow Jones Industrial Average's worst performers included Bank of America, down 2.62%, Microsoft, down 2.61%, and JPMorgan Chase, down 2.34%.

European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 2.23%, France's CAC 40 fell 2.42%, while Germany's DAX 30 finished down 2.28%. Meanwhile, in the U.K. the FTSE 100 finished down 0.79%.

On Wednesday, the U.S. is to release private-sector data on pending home sales, though markets will continue to monitor events in the Middle East.