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US stocks decline as Kerry chimes in on Syria

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US stocks decline as Kerry chimes in on Syria

The stock market rally was short lived following remarks made by John Kerry. The United States Secretary of State delivered a highly politicized statement regarding the use of chemical weapons in Syria’s ongoing conflict, which claimed the lives of more than 1,000 people. Kerry made the case for direct US intervention in Syria in the aftermath of the chemical attack, despite the recent UN investigation showing it was the rebels, not Assad’s regime, that were behind the attack.

The benchmark gauges tumbled on Syrian turmoil, as the prospect of US intervention weighed heavily on investors. Direct intervention in Syria, it is feared, could affect US assets, and trigger risk aversion in the financial markets.

The benchmark Standard and Poor’s 500 fell 0.40 percent to 1,656.78, as nine of its ten major groups declined. Tyson Foods, the world’s second-largest processer of meat products, incurred the steepest decline in the S&P 500, losing more than 7.3 percent to $29.17 a share. The declines were triggered after Bank of America’s Merill Lynch analysts cut Tyson shares to neutral, and revised the company’s 2014 profit forecast.

Last week the S&P 500 registered its first weekly gain since August 2nd. on growing optimism for global recovery. Eurozone manufacturing and services growth outpaced expectations, raising hopes the global economy is on the right track.

The Dow Jones Industrial Average fell 0.43 percent to 14,946.50. Proctor & Gamble led the declines in the DJI, losing 1.84 percent to $78.54 a share. The Dow Jones has declined close to 4 percent over the past month, as Federal Reserve hawkishness has increased expectations for a bond taper next month.

In terms of trade volume, the US stock market is headed for its second slowest month in at least five years. On Monday shares traded 24 percent lower than the three-month moving average.

The ongoing situation in Syria is likely to play a bigger role in the US and global markets in the mid-term. According to United States Army General Martin Dempsey, the Syrian crisis is a “ten-year issue,” leading us to believe the magnitude of its impact is yet to be seen.

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