Yesterday, the market rose early despite bad news. Today, stocks are ignoring the good news as they selloff in response to a potential U.S. attack on Syria.
Reuters The Dow Jones Industrials have dropped 126 points, or 0.8%, to 14,805 today, while the S&P 500 has fallen 1.2% to 1,636.70. The Nasdaq Composite is off 1.7% to 3596.70.
It’s not as if there hasn’t been good news. The Richmond Fed Index, for instance, rose to 14, from minus 11 last month and well above forecasts. Consumer confidence, meanwhile, rose to 81.5 in August, above forecasts for a drop to 79.1.
But no. It’s all about the potential for airstrikes in Syria. Reuters is reporting that an attack might be imminent:
Western powers could attack Syria within days, envoys from the United States and its allies have told rebels fighting President Bashar al-Assad, sources who attended the meeting told Reuters on Tuesday.
U.S. forces in the region are “ready to go”, Defense Secretary Chuck Hagel said, as Washington and its European and Middle Eastern partners honed plans to punish Assad for a major poison gas attack last week that killed hundreds of civilians.
Investors, however, can take comfort from the fact that markets have, on average, risen following the beginning of conflicts, according to Ned Davis Research. Some 126 days after the statr of Desert Storm, for instance, the Dow Jones Industrials gained 18.7%.
Boston Scientific (BSX) has dropped 4.2% to $10.81, making it the second-biggest loser in the S&P 500, while Zions Bancorp (ZION) has fallen 4.1% to $28.03.
Still, some stocks are bucking the trend. Goodyear Tire & Rubber (GT) has gained 1.4% to $18.90, the largest gainer in the S&P 500, after reaching a deal with a union. The real winners: Hi-Tech Pharmacal (HITK) has gained 22.3% to $43.05 after agreeing to be purchased by Akorn (AKRX), which has jumped 9.6% to $18.02.
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