Syria worries stagger markets
By The Associated Press
Published: Tuesday, Aug. 27, 2013, 7:18 p.m.
NEW YORK — Fears of an escalating conflict in Syria rippled across financial markets on Tuesday, sinking stocks, lifting gold and pushing the price of oil to the highest in a year and a half.
The increasing possibility of U.S. military strikes raised worries on Wall Street that energy trade in the region could be disrupted, raising fuel costs for consumers and business.
“If Syria becomes drawn out and becomes a long-term issue, it's going to show up in things like gas prices,” said Chris Costanzo, investment officer with Tanglewood Wealth Management.
The Dow Jones industrial average fell 170.33 points, or 1.1 percent, to 14,776.13, the lowest in two months.
The Standard & Poor's 500 index lost 26.30 points, or 1.6 percent, to 1,630.48 and the Nasdaq composite fell 79.05 points, or 2.2 percent, to 3,578.52.
“The law of unintended consequences and the history of previous military interventions in the region is not a recipe for political and economic stability,” said Neil MacKinnon, global macro strategist at VTB Capital.
The sell-off was broad. All 10 industry sectors in the S&P 500 index were in the red, and only 31 of the index's 500 stocks rose. Utilities and other high dividend-paying stocks mostly escaped the selling.
The impact wasn't just in stocks. Gold prices advanced and government bond prices jumped because traders see those investments holding their value better in times of uncertainty. Gold rose $27, or 2 percent, to $1,420 an ounce while the yield on the benchmark 10-year Treasury note fell to 2.71 percent from 2.79 percent.
While Syria has little oil, traders feared an intervention in the country could cause further instability in the Middle East and possibly disrupt the flow of oil from the region. Oil surged $3.09, or 2.9 percent, to close at $109.01 a barrel, the highest closing price since February 2012.
“People worry about this becoming a worst-case scenario and turning into a regional conflict,” said Bill Stone, chief investment strategist at PNC Asset Management.
Energy prices dragged down the airline industry on concerns that higher oil prices could lead to higher fuel costs. United Continental Holdings, the world's largest airline by revenue, dropped $2.15, or 7.2 percent, to $27.71 and Delta Air Lines lost $1.16, or 5.7 percent, to $19.11.
Stone said oil prices could start weighing on consumer spending down the road, but it is still too early to gauge the longer-term impact.
The average price for a gallon of gasoline remained unchanged in the United States at $3.54 a gallon. Prices have held steady during the past week, and are down 9 cents from a month ago.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Pennsylvania, other states considering bids to host Boeing 777X production
- Investors put squeeze on prospective homeowners’ American dreams
- How can I delete my search history on Facebook?
- Consol cuts office workers after Murray deal
- Employers say friends can ease work stress
- Big oil pushes limits
- Workplaces reach out to vets
- Airline merger reshapes industry’s landscape
- Flabeg Solar U.S. Corp. plant to stay out of business
- Companies fear burnout affects bottom line, advises workers to relax
- Unemployment rate falls as employers add 203,000 jobs nationwide