All is Not Well as Futures Sink on Syria, U.S. Debt Debate
NEW YORK (TheStreet) -- Stock futures were slumping Tuesday on concern the U.S. may strike Syria and amid worries that Congress will once again force a stalemate over the debt ceiling and a protracted debate over spending cuts.
Futures for the S&P 500 were falling 11.75 points, or 11.98 points below fair value, to 1,642.5. Futures for the Dow Jones Industrial Average were declining 90 points, or 85.46 points below fair value, to 14,841. Futures for the Nasdaq were shedding 24.75 points, or 25.52 points below fair value, to 3,096.25.
December gold futures were surging $25.10 to $1,418.20 an ounce as investors fled to safety assets. October crude oil futures were spiking by $2.51 to $108.43 a barrel on concerns that the conflict with Syria would result in the disruption of supplies.
J.C. Penney (JCP) shares were off by 1.35% to $13.17. Pershing Square Capital Management's Bill Ackman is selling his entire stake in J.C. Penney. The stake, about 18% of the struggling retailer's common stock, is worth about $526 million, based on J.C. Penney's closing stock price on Friday.J.C. Penney will not receive any proceeds from the sale of the shares. Major U.S. stock markets sharply dropped Monday after Secretary of State John Kerry said there was "undeniable" evidence that Syria had used chemical weapons, leaving investors to wonder whether the U.S. will take overt military action to unseat the Assad regime. U.S. Defense Secretary Chuck Hagel told BBC that the U.S.-led forces would be "ready" to strike if President Barack Obama ordered an attack. Meanwhile allies of Syria including Russia and China have been warning against military intervention in the country warning of the devastating results for the region. Treasury Secretary Jack Lew's warning that the U.S. government could reach its debt limit by mid-October and that Congress should take some action about that soon also sent jitters through the markets. "Geopolitical risk is back to worry financial investors," while "the U.S. Treasury has started the roughly semi-annual debt ceiling dance with Congress," Paul Donovan, a London-based global economist at UBS, commented in a note.
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