News Of Potential US Action In Syria Sends Stocks Down At Last Minute

Michael Teague  |

Stocks unexpectedly dropped during the last half-hour of trading on Monday after US Secretary of State John Kerry announced that President Obama would hold the Syrian government accountable for an apparent chemical weapons attack that occurred last week on the outskirts of the country’s ancient capital, Damascus.

Kerry told the press that responsibility for the attack was undeniably the work of the Ba’athist regime that has dominated Syria for over three decades since the President Bashar al-Assad’s father, Hafez, wrested control of the “beating heart of Arabism” from party rivals in a 1970 coup.

Indices had spent the day on the incline until the announcement, and dropped sharply in its wake, suggesting that investors were nervous about the unintended consequences of another US military venture. Though the US “led from behind” when Western nations such as the UK and France provided air cover and other covert support in the effort to overthrow Libyan leader Muammar Qhaddafi some two years ago, the Syrian situation has immense qualitative differences that make such a venture even more risky that the Libyan one.

Syria is a more densely populated and multi-sectarian landscape, where air sorties against regime defenses and strategic positions are sure to result in civilian casualties and pulverized infrastructure than would not have been possible in the vast and uninhabited expanses of Libyan territory across which regime forces were spread in an attempt to crush anti-government fighters. Furthermore while the Libyan intervention was sanctioned by the international community, securing UN Security Council resolution for “kinetic action” in Syria is a total impossibility given the staunch opposition on the part of both China and Russia for any intervention. Any action would thus be another example of the US and, by extension the West, acting unilaterally in the affairs of another Middle-Eastern/majority Muslim nation.

The Standard & Poor’s 500 ended the day 0.4 percent lower to 1,656.78 points, while the Dow Jones Industrial Average closed at 14,946.46 points, down 0.43 percent, while the NASDAQ ended the day lower by 0.01 percent, to 3,657.57 points.

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The S&P 500 was weighed by consumer goods stocks, with Tyson Foods (TSN) and Archer Daniels Midland Company (ADM) were the day’s biggest losers, with Campbell Soup Co. (CPB) and McCormick & Co. (MKC) not far behind. Amgen (AMGN) was up nearly 8 percent by the closing bell after announcing the finalization of its acquisition of Onyx Pharmaceuticals (ONXX) for $10.4 billion.

The Dow ended the day with 26 of its 30 components in the red after spending most of Monday’s trading session higher, with Procter & Gamble (PG) and Microsoft (MSFT) leading the way down, followed by Verizon Communications (VZ) and AT&T (T) . Some tech companies, especially ones with access to various forms of data about their consumers, may have been affected by fresh revelations about the National Security Agency’s domestic spying program. Tech firms have been denying any collaboration with the NSA, but new documents revealed by the UK’s Guardian on Sunday showed that techs like those named above, as well as companies such as Google (GOOG) , actually received compensation from the agency for allowing it to access sensitive user data.

Tech shares also weighed down the NASDAQ, with Cisco Systems (CSCO) , Intel (INTC) , and Yahoo! (YHOO) ending the day lower. Meanwhile, Facebook (FB) watched its stock close at over $40 for the first time, on a nearly 2 percent advance to $41.34, while Tesla Motors (TSLA) continued its rise, ending the day up 1.5 percent to $164.22.

[Image: Syrian Rebels, courtesy of Wikimedia Commons]

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