U.S. stocks fell in the last hour of New York trading after Secretary of State John Kerry raised the odds for armed U.S. intervention in Syria. Kerry said additional information about a recent reported chemical attack is being compiled and will be made public. With U.S. allies and other countries expressing the need to punish the government of Syrian President Bashar Al-Assad for what looks like the use of chemical weapons on August 21 in the Damascus suburb of Ghouta, markets closed modestly lower. The Standard & Poor’s 500, which had traded at 1666.06 at 3 p.m., fell to close the day at 1656.78, down 0.4% from Friday’s close at 1663.5.
U.K. Foreign Secretary William Hague said that his country is convinced that Assed was behind the attack and that there was agreement with the United States and France to act. With Syria’s ally Russia almost certain to exercise its Security Council veto at the United Nations, there’s virtually no chance for a U.N. resolution sanctioning military action. Russia’s reaction will probably stop short of a military response but the same degree of certainty can’t be applied to the reaction of Syria’s other major ally Iran. Iran’s options include support for Assad ally Hamas to attack Israel or attacks on oil shipping in the Persian Gulf. It’s that latter possibility that is most on the market’s mind.
Or at least the mind of everyone not already on vacation. Only 546 million shares traded today on the New York Stock Exchange. That’s the lowest total since August 5.
Syria is the 32nd largest oil producer in the world—just behind Ecuador and just ahead of Thailand—at 400,000 barrels a day. Iran, traditionally the second largest producer in OPEC, has slipped the No. 6 slot at 4.2 million barrels a day in 2013.
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