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US STOCKS-Wall St set to slide at open as Syria tension escalates
August 27, 2013 / 1:27 PM / 4 years ago

US STOCKS-Wall St set to slide at open as Syria tension escalates

* NYSE, Nasdaq at odds over cause of last week’s Nasdaq outage

* J.C. Penney shares drop after top shareholder sells investment

* Consumer confidence data due

* Futures down: Dow 126 pts, S&P 17 pts, Nasdaq 35 pts

By Rodrigo Campos

NEW YORK, Aug 27 (Reuters) - U.S. stocks were set to fall at the open on Tuesday after Western powers told the Syrian opposition to expect a strike against President Bashar al-Assad’s forces within days, according to sources.

The sources, who attended a meeting between envoys from 11 core Friends of Syria alliance members and the Syrian National Coalition in Istanbul, said “action to deter further use of chemical weapons by the Assad regime could come as early as in the next few days.”

Adding to the rising tension, Defense Secretary Chuck Hagel said in a television interview with the BBC on Tuesday the U.S. military is ready to act immediately should President Barack Obama order action against Syria.

“Prudent investors seem to be factoring (Syria) in a little bit more than they had been previously,” said Gordon Charlop, a managing director at Rosenblatt Securities in New York.

S&P 500 futures fell 17 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 126 points, and Nasdaq 100 futures lost 35 points.

U.S. Secretary of State John Kerry on Monday laid the groundwork for possible action against Assad’s government, calling for accountability over what he called a “moral obscenity.”

Kerry’s words triggered a flight to safety in financial markets, with U.S. stocks turning lower in the last hour of trading on Monday. Asian stocks fell overnight and European shares were sharply lower despite a 16-month high in a measure of German business sentiment.

The possibility of military action in Syria is highly disruptive of markets “because it’s bringing in Russia, and that complicates things tremendously,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

The U.N. Security Council has been deadlocked on Syria since 2011. Russia and China have vetoed three resolutions condemning Assad and calling for punitive steps against his government.

Gold prices were near a 12-week high and the yen rose as the geopolitical tension lured investors towards safe-haven buying.

On Wall Street, five days after a glitch that paralyzed Nasdaq-listed stocks for three hours on all U.S. markets, rivals Nasdaq OMX and NYSE Euronext have a different understanding of what happened in the period preceding and during the blackout, with each side blaming the other for the outage, according to sources.

Shares of J.C.Penney fell 2.3 percent in premarket trading a day after hedge fund manager William Ackman, the biggest share holder, said he had sold his entire stake after his campaign to overhaul the retailer failed.

Richard Schulze, the founder and largest shareholder of Best Buy, said in a regulatory filing he plans to start selling its stock this fall.

Shares of Tiffany & Co rose 1.1 percent in premarket trading after the U.S. jeweler reported a higher quarterly profit and raised its full-year forecast.

U.S. single-family home prices rose in June, though the pace of gains slowed slightly, a closely watched survey showed. Other data due include the Conference Board’s release of consumer confidence for August at 10 a.m. (1400 GMT).

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