- Tensions rise between Syria and US
- WTI crude jumps to five-week high
- Consumer confidence beats forecasts in August
Dow Jones: -0.82%
S&P 500: -1.13%
US stocks sank sharply on Tuesday in New York as risk appetite on Wall Street was hit by the possibility of US military invention in Syria.
Investors largely shrugged off a survey of US consumer confidence which edged higher this month, surprising analysts who had expected a slightly decline. The Conference Board's index rose to 81.5 in August from an upwardly revised 81.0 in July (consensus estimate: 79.0), driven by an increase in the economic expectations index which was boosted by improved labour-market sentiment.
"In all, this report is consistent with our expectation that consumer confidence will continue to grind higher as labor and housing markets continue to improve," said analyst Cooper Howes from Barclays.
Oil prices were rising strongly today on concerns that heightened tensions in Syria could disrupt Middle East supplies. West Texas Intermediate reached a five-week high of $109.32 early on in the day, matching the July 19th high that's the steepest price since March 2012. Brent crude meanwhile hit a six-month high of $113.97 a barrel.
US Secretary of State John Kerry said last night that Syria would be held accountable for the "moral obscenity" of an alleged chemical weapons attack that has killed well over a thousand people. "By any standard it is inexcusable," he said, sparking speculation of a potential US involvement in the Syrian crisis.
Defense Secretary Chuck Hagel said that the US has "assets in place" and forces are "ready to go" if intervention is decided. Meanwhile, UK Prime Minister David Cameron recalled parliament to vote on possible response to last week's attack.
Syrian Foreign Minister Walid al-Muallem responded by saying that the government - which has not yet claimed responsibility - wouldn't step down and its defences would "surprise" those wanting to step in.
Acting as a backdrop, Capital Economics commented on how the recent "sell-off" in emerging market assets should have a limited impact on the global economy. That was the prevalent view at the Jackson Hole Symposium this past weekend in the US state of Wyoming.
Defensive stocks were among the few risers today as investors scaled back their appetite for risk: telecoms and utilities were higher with AT&T leading the way on the Dow. Cyclical sectors such as banking were out of favour, with Wells Fargo, Citigroup, Bank of America and JPMorgan Chase all registering losses.
Retailer Best Buy fell after founder and major shareholder Richard Schulze revealed his intention to sell stock, though the amount was unknown.
Shares in drug maker Acura Pharmaceuticals plummeted after the company said it was delaying the US Food and Drug Administration application for its Aversion H&A medication.