Markets Drop as Decision on Syria Looms
COLUMBIA - The S&P closed out August at its lowest point all month.
The S&P dropped .32% this past week, while the Dow Jones Industrial Average and NASDAQ slipped .21% and .84% respectively. Analysts attributed August's low close to the looming possibility of a limited-action strike in Syria. Stocks began dropping Friday after Secretary of State John Kerry accused the Syrian government of using chemical weapons on its citizens and President Barack Obama called for a military response.
Analysts say unrest in the Middle East contributed not only to stocks dropping, but also to gas prices climbing during Labor Day Weekend. Historically, drivers have seen lower costs at the gas pumps during the three-day holiday weekend. However, the cost of gas spiked more than 10-cents throughout Missouri between Kerry's speech on Friday and the end of the weekend. While Syria itself does not produce a significant amount of oil, analysts say starting in July, the political upheaval in Egypt has led to a steady rise in cost.
Analysts predict August's weak ending will transition into a bleak September. Historical charts show September is traditionally the worst month of the year for stocks. Additionally, the unrest in Syria is expected to continue creating market instability.
The heated debate between Obama and Republicans regarding the debt ceiling is also expected to contribute to a stock market downturn in September. In 2011, when lawmakers initially extended the debt ceiling deadline to October 2013, the nation's AAA credit-rating took a hit and consumers saw a major stock market sell-off.
Finally, the Federal Reserve is set to make a decision regarding pulling back bond purchases. Analysts predict the release of August's jobs report will play a large factor in this decision.