11:10 AM New York – Rising Middle East tension overshadowed trading in markets of stocks, bonds, currencies and commodities. Oil jumped 2% and markets in the euro zone dropped as much as 3% as the prospect of military attack on Syria rose.
Growing political tensions in the Middle East overshadowed trading in stocks, bonds, currencies and commodities markets.
In New York, S&P 500 index declined 1% to 1,639.93 and the Nasdaq Composite Index fell 1.1% to 3,615.95.
President Barack Obama is under growing pressure from military contractors, U.S. allies and Congress to ramp up military action against Syria.
U.S. Foreign Secretary John Kerry used the latest attack on opposition group in Syria that have been reported to have killed more than 1,300 people to delay peace talks. Kerry ramped up pressure on the Assad regime and said the U.S. is not likely to stand by when Assad regime kills innocent people.
However, skepticism in Europe and in Middle East ran high on the U.S. sabre rattling.
Russia, key ally of Syria warned the U.S. in delaying the peace talks and Iran, the financial sponsor of Syria also warned of the growing regional conflict.
More than one million Iraqi civilians have been killed after the U.S. occupied the nation under the disguise of spreading Western style democracy and overthrew Saddam regime.
In addition, more than 200,000 people have been killed after the U.S., UK and NATO allies played a crucial role in the killing of Mohmar Gaddafi in Libya.
In commodities trading, crude oil futures for immediate month delivery increased 2% to $113 a barrel.
On the economic front, U.S. consumer confidence index in August increased to 81.5 from 81 in July.
In a separate report, the S&P/Case-Shiller index tracking metropolitan home prices in 20 cities increased 12.1% in June from a year ago month after advancing 12.2% in May.
In European trading all indexes fell.
FTSE 100 index in London declined 0.6%, DAX 30 in Frankfurt dropped 2% and CAC-40 index in Paris plunged 2.2%.
In Zurich, SMI index decreased 1.6%.
Italian banks were in focus after the yield on 10-year Italian bonds increased 5 basis points to 4.43%. UniCredit SpA and Sanpaolo SpA dropped more than 4%.
U.S. Stocks in Review
Best Buy Co (BBY
) decreased 2% after the electronics retailer founder Richard Schulze disclosed a plan to reduce his holding in the company to diversify his assets.
J.C. Penney (JCP
) edged 0.3% lower and activist investor Bill Ackman controlled Pershing Square Capital Management L.P. sold its entire stake in the retailer for $504 million. The private fund is estimated to have lost nearly 90% of its value.
Precious metal miners increased after gold prices rose to a 2-month high.