U.S. stocks fell In Friday’s trade and the S&P 500 index recorded the steepest monthly drop since May 2012, this all happened due to investors holding off making large bets before a long weekend with the situation in Syria still uncertain and may escalate further. S&P opened at 1638.89 and went higher at a point at 10AM to 1640.08; however, later on it settled lower at 1628.05.
The S&P 500, a stock market index based on the market capitalizations of 500 leading companies publicly traded in the U.S. stock market, reported a loss of 0.3 percent to 1,632.97 at 4 p.m. in New York to extend its loss for August to more than 3 percent. It was the steepest monthly drop for the S&P 500.
Whereas the Dow Jones industrial average was down 30.87 points at 14,810.08, the Standard & Poor’s 500 Index was down 5.27 points at 1,632.90. For several market specialists, it has everything to do with the Syrian crisis that is a leading source of concern. On one hand, the Nasdaq Composite Index was down 30.44 points at 3,589.87, on the other capping a 3.1 percent slide in August; the S&P 500 lost 1.8 percent to 1,632.97 for the week.
Though the overall economic growth of the U.S. is on the right track and expected to do well in the second half of the year, experts now suspect that the Syrian crisis may slow down the growth. Geopolitics and weak economic data often tend to create volatility in market; here when the conflict in Syria is casting a pall over the market, thinking for higher growth sounds impractical for many market analysts.
Tapering of Monthly Bond Buying by Fed
Amidst the growing speculation that the Fed will reduce its monthly bond buying, the S&P 500 declined 4.5% from a record high on Aug. 2. Earlier, in addition to three rounds of bond purchases by the Fed, it was the better-than-forecast earnings that have helped extend the bull market in U.S. equities to a fifth year. It has also helped the S&P 500 surge more than 150 percent from a 12-year low in 2009.
U.S. Government to Exhaust its Borrowing Funds Limits
According to economists September will be an important month as the U.S. government is approaching limit on federal spending; it is expected to exhaust its ability to borrow funds in mid-October.
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