NEW YORK (AP) — Stocks declined broadly in early Tuesday trading as investors feared that the possibility of a U.S. military intervention in Syria could become a reality.
The Dow Jones industrial average lost 86 points, or 0.6 percent, to 14,858 as of 10:15 a.m. EDT, while the Standard & Poor's 500 fell 13 points, or 0.8 percent, to 1,644. The Nasdaq composite dropped 31 points, or 0.9 percent, to 3,626.
Investors have fretted about the possibility of U.S.-led military action against the regime of President Bashar Assad since U.S. Secretary of State John Kerry said Monday that it was "undeniable" that the Syrian government used chemical weapons.
"The law of unintended consequences and the history of previous military interventions in the region is not a recipe for political and economic stability," said Neil MacKinnon, global macro strategist at VTB Capital.
Traders moved money into investments typically considered safe during times of crisis or uncertainty, like gold and U.S. Treasury bonds. Gold rose $24.50, or 1.8 percent, to $1,417.50 an ounce while the yield on the benchmark 10-year Treasury note fell to 2.76 percent from 2.79 percent on Monday.
Oil prices also rose on fear that an intervention in Syria could cause further instability in the Middle East and possibly disrupt the flow of oil from the region. Oil jumped $2.70, or 2.6 percent, to $108.62 a barrel, the highest price since May 2011.
Concerns over a U.S.-Syria conflict spilled over into global markets.
In Europe, the FTSE 100 index of leading British shares was down 0.8 percent at 6,439 while Germany's DAX fell 2 percent to 8,263. The CAC-40 in France was 2.1 percent lower at 3,977.
Wall Street is also digesting two economic reports, one on U.S. consumer sentiment, the other on home prices. The Conference Board said its consumer confidence index rose to 81.5 in August, up from 80.3 the month before. Economists had expected 79, according to FactSet.
The Standard & Poor's/Case-Shiller 20-city home price index rose 12.1 percent in June from a year earlier, nearly matching a seven-year high. But month-over-month price gains slowed in most markets, a sign that higher mortgage rates may be weighing on the housing recovery.
In corporate news, Tiffany & Co. rose $1.23, or 1.5 percent, to $82.75. The jewelry retailer said its second-quarter profits rose a better-than-expected 16 percent, helped by strong sales in China.
J.C. Penney Co. fell 9 cents, or 0.5 percent, to $13.29 after the company's biggest investor, Bill Ackman, said he plans to sell his entire stake in the discount department store chain.
AP Business Writer Pan Pylas contributed from London.
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