Worst Day for Wall Street over Geopolitical Uncertainty
Wall Street reported its worst day for stock prices since June as mounting uncertainty over U.S/Syria political situations increase.
Stocks across the board suffered losses Tuesday as concerns continue to escalate with talk of a potential U.S strike on Syria. The geopolitical concerns are adding to the current declines based on the possibility the U.S Federal Reserve may begin slowly the stimulus package in September. Although the U.S government has the support of several allies including Britain, France, the Arab League and Canada in the need for a swift response to the Assad, unrest in the investing world is being felt on Wall Street.
Investors are concerned about the financial consequences the two situations could potentially have on the stock market and many institutions are beginning to pull away from more risky ventures in their portfolios in preparation of what may come in the near future. The over 20% increase in the CBOE volatility index over Monday and Tuesday is a direct reflection of this growing nervousness among investors.
All 10 of the S&P 500 sectors ended trade Tuesday down in numbers which over 80% of companies traded on both the New York Stock Exchange and NASDAQ fell slightly. This ends the weakest day reported by Wall Street in trade particularly in the areas of financials and materials, two sectors that could potentially feel the greatest affects of the economy. The Dow Jones average fell 170.33 in the industrial sector despite a 2.8% rise in the price of crude oil.
Standard & Poor experienced a 1.6% loss, down 26.30 points marking the largest daily decline since the end of June. The NASDAQ composite index ended the day down 79 points, with the benchmark index dropping 2.9% for August numbers could result in the worst month since May of 2012. Overall trading was light as investors held their breath in anticipation of decisions regarding both the Syria situation and from the Federal Reserve regarding the stimulus. Only 6.28 billion shares were traded for the entire day of Tuesday.
Specific companies reporting losses for Tuesday include Tiffany & Co, down just over 1%, Goldman Sachs with 3% decreases and shares of NASDAQ OMX group with a 2.3% decrease. In light of declines in stock values U.S regulators are now requesting a detailed time line for last Thursdays three hour market blackout.