The S&P 500 declined 1.6% and the Dow was lower by 1.14%. Today was the largest decline for the S&P 500 since June 20.
Several factors weighed on the market today. Continued fears regarding Syria, Fed tapering uncertainty, the changing of the guard at the Fed and the annual debt ceiling debate. Even with the sharp recent pullback selling has not been at alarming levels. There is just a buyers strike going on right now. Seasonal factors, the above mentioned issues, and simply no real reason to buy right now led to another day of selling.
Reports are that the U.S. anticipates a “measured and “brief” military response in retaliation to actions from Syria. Reports over the past few days strongly suggest that the U.S. is contemplating some sort of military response to Assad’s chemical weapons attacks.
Homebuilders, regional banks, semis, and steel stocks were hit the hardest today. Defensive sectors like utilities, telecom, and consumer staples rallied as treasury yields moved lower.
Boehner promised a “whale of a fight” on debt issue concerns. The market is never in favor of any politician hinting at a prolonged stand off on any issue, especially one as potentially contentious as the debt ceiling.
European stocks had their worst day in quite some time with the primary culprit being heightened concerns over Syria and issues with the Italian government.
Sentiment continues to improve in China. July industrial data topped expectations and investors’ confidence in official August PMI data set for release over the weekend has increased. The Shanghai index was one of the few indexes that finished higher today.
Commodities were mostly higher, with precious metals, copper, crude, wheat, and natural gas trading ahead of the tape. Gold and silver also added slight gains again today, up strongly from their lows reached late June.
U.S. consumer confidence moved higher in August. The conference board consumer confidence index edged higher by 0.5 points for the month to post a reading of 81.5. This was above consensus expectations of 77.0.
Source: PFS Group
