Stocks fall as oil reaches 18-month high on Syria, gold rallies

‘Being Punished’

‘‘For anyone who thought that the Arab Spring was going to be a temporary situation, it’s proven to not be the case,” Erik Wytenus, Hong Kong-based head of foreign exchange and commodities at JPMorgan Private Bank in Asia, said on Bloomberg Television’s “On the Move” with Rishaad Salamat. “You’ve got a bit of short-term, safe haven, flight-to-quality bid. Emerging markets are being punished by severe capital outflows, which are hitting their currencies inordinately hard.”

Financial, technology and industrial shares lost at least 2% to lead declines among all 10 main industry groups in the S&P 500. Microsoft Corp., Bank of America Corp. and JPMorgan Chase & Co. slid more than 2% to lead declines in the Dow Jones Industrial Average. Southwest Airlines Co. tumbled 3.5% amid concern surging oil prices will boost fuel costs.

D.R. Horton and PulteGroup Inc. slid more than 3% as a report showed gains in home prices have slowed. Best Buy Co. lost 2.3% after Richard Schulze, the electronics retailer’s founder and largest shareholder, said he plans to sell an undisclosed amount of its stock to diversify his assets and raise money.

Economic Data

The Conference Board’s index of U.S. consumer confidence increased to 81.5 in August from 81 the prior month. The median forecast in a Bloomberg survey called for a reading of 79. Another report today showed home prices increased at a slower pace in June. The S&P/Case-Shiller index of property values climbed 12.1% from the same month in 2012 after rising 12.2% in the year ended in May, the biggest gain since March 2006.

Ten-year Treasuries rose for a fourth day, pushing the yield seven basis points lower to 2.72%. The U.S. will hit the $16.7 trillion debt ceiling in mid-October, Treasury Secretary Jacob J. Lew said, urging Congress to raise the limit “as soon as possible.”

European Markets

The Stoxx Europe 600 Index lost 1.8%, the biggest drop since June, as 18 of 19 industry groups retreated. Trading was 21% higher than the 30-day average, according to data compiled by Bloomberg.

Polymetal International Plc plunged 8.5% as HSBC Holdings Plc downgraded its recommendation on the Russian gold and silver miner part-owned by billionaire Alexander Nesis.

The MSCI Emerging Markets Index declined 1.7%, the most on a closing basis since July 3. The Philippine Stock Exchange Index tumbled 4% amid protests over government spending and the Thai SET Index slumped 2.7%, extending declines from this year’s peak to more than 20%. The Sensex Index sank 3.2% in Mumbai. The Jakarta Composite index retreated 3.7%.

The lira slid as much as 2.1% to 2.0398 per dollar and Turkey’s benchmark equity gauge slipped 4.7%. Turkey will join a coalition against Syria if the UN fails to take action, Milliyet newspaper reported, citing Foreign Minister Ahmet Davutoglu.

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