Dow falls 170 on Middle East worries
The Nasdaq's loss is its largest in more than a year. Stocks are suffering biggest monthly losses since May 2012 on concerns about possible U.S. response to nerve-gas use in Syria.
As a rule, investors don't like uncertainty; they definitely dislike uncertainty created by volatile politics and what's believed to be a more aggressive use of sarin gas in Syria.
That was the primary reason why stocks fell heavily Tuesday for a second day in a row.
The Nasdaq Composite suffered its biggest one-day loss in more than a year. For the Dow Jones industrials ($INDU) and the Standard & Poor's 500 Index ($INX), the selling is setting August up as the worst month for since May 2012.
The worries about the Middle East -- and the possibility of an other fight in Washington about the budget -- affected politically-sensitive commodities. Gold (-GC) traded up as high as $1,424 an ounce before settling at $1,420.20, up $27.10. It was gold's highest settlement since May 20. Gold has has jumped 13.1% since bottoming on June 27.
Crude oil (-CL) in New York hit a high on $109.32 a barrel on Tuesday and settled at $109.01, up $3.09. That was its highest close since May 2012. Expect pump prices to move higher in the next week. AAA put the national average price of regular unleaded gasoline at $3.542 a gallon, up from Monday's $3.541. Brent crude in London jumped $3.63 to $114.36, its highest level since March.
The Dow, meanwhile, finished down 170 points to 14,776. It was the blue chips' worst loss since Aug. 15. The blue-chip index has fallen 5.6% since hitting a closing peak of 15,658.36 on Aug. 2. The S&P 500 was off 26 points to 1,630, its worst loss a 41-point decline on June 20. The index is down 4.6% since its closing peak of 1,709.67, also on Aug. 2.
The Nasdaq Composite Index ($COMPX) dropped 79 points to 3,579, its worst loss since June 1. 2012. The index is off 3.1% since hitting a 13-year high of 3,692.95 on Aug. 5.
Futures trading suggest U.S. markets will open flat on Wednesday.
But the market is looking weak. The Dow, S&P 500 and Nasdaq are all trading below their 50-day moving averages, an important barometer of investor confidence. The relative strength indexes for the Dow and S&P 500 are below 40, a sign of weak momentum. The Dow's RSI finished Tuesday at about 27, which suggest the index is oversold. A reading above 70 is considered overbought.
The big question was what the Obama administration might do to punish the regime of President Bashar al-Assad. Reports from the region suggest the United States is gearing up for a swift military action, possibly as soon as Thursday, in a punitive show of force against the al-Assad regime, the Guardian newspaper in London said.
Syria has denied its forces were responsible for a chemical attack in a suburb of Damascus, which is believed to have killed hundreds.
The potential for violence has been a prime catalyst for the market's stress over the last week.
It was not easy to find winners. Goodyear Tire & Rubber (GT), Crown Castle (CCI), which rents antenna space to wireless companies, and Ventas (VTR), a healthcare real-estate investment trust, were the S&P 500 leaders.
Early buying in J.C. Penney (JCP) pushed the shares up as much as 4.1%, but the shares fell back to a loss of 22 cents to 13.13. Late Monday, hedge-fund manager Bill Ackman sold out his entire position in the department-store chain, taking a loss of some $500 million loss in the process.
Coca Cola (KO), up 3 cents to $38.15, and Verizon Communications (VZ), up a penny to $46.95, were the only Dow stocks with gains.
Comcast (CMCSA), DirecTV (DTV) and Tesla Motors (TSLA) were the top performers of the six gainers in the Nasdaq-100 Index ($NDX). The index fell 63 points to 3,060.
Apple (AAPL), Microsoft (MSFT), Google (GOOG) and Amgen (AMGN) were responsible 26 points, or 41%, of the Nasdaq-100 loss. (Microsoft owns and publishes Top Stocks, an MSN Money site.)
With the big run up in oil prices, airline stocks were sharply lower. Delta Air Lines (DAL) dropped $1.16 to $19.11. United Continental Holdings (UAL) was off $2.15 to $27.71. The Dow Jones Transportation Average ($DJT) fell 168 points to 6,311.
And as uncertainty continued, many investors fled to bonds. As a result, the 10-year-Treasury yield fell to 2.72% from 2.751% on Monday and 2.82% on Friday.
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Screw 'em......Screw the whole Middle East..
Grow a pair.
"This is nonsense. The market isn't declining because of Syria tensions. What a load of bull. Come up with a better reason"
It's been overpriced for quite awhile and only needed an excuse to correct, any excuse.
It's awful that Syria is doing this to its own people, but it's really not our place to stick our nose into Syria's business. It's exactly the sort of thing that keeps getting us into trouble. Publicly denounce Syria, yes, but attack them? Absolutely not. Or maybe we didn't learn our lesson from Iraq.
want a better eason?? It's vacation time and I need lots of $$$$$ so i'm inventing a crisis.....
after all, we do so much biz with Syria and we get our oil from there....oh....wait....if there were
no Syria we wouldnt even notice....never mind
I guess Obama has a round of golf going on. Gotta focus, POTUS.
Typical Obama lack of leadership. Let's posture for 7-10 days, announce that we will probably do something, name all possible targets, give the bad guys a week to hide, then send a million dollar cruise missile in for show.
And, don't be surprised that we are blamed for hitting a school or mosque (already targeted by the terrorists).
Can't blame Bush on this one. Worst president, ever.
The United 'Police State' of America,
Funny, I don't see any of the other major players like China, Russia, Germany and the EU, India or even crackpots like N. Korea 'sabre rattling' for yet another godamn senseless war in the bottomless cesspool that is otherwise known as the Middle East. This country just needs to stop trying to police the entire planet, stay the Hell out of other people's business and worry about the thousands of unattended problems that we have in our own country, which is literally falling apart at the seams.
How many more young Americans do we need to bring home in body bags and how many more $Trillions do we have to waste on these sandpits from the Dark Ages? One could get into a Time Machine and fast forward 500 years and when you got out those Muslim nutcases would still be killing each other over there, and it will never change. We simply need to mind our own business. Enough! Peace to all ~
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