Syria uncertainty, unemployment push stocks down

PARIS (AP) — Uncertainty over a Syrian military intervention and a continued high unemployment rate drove European markets down on Friday.

Japan’s index also fell after data showed manufacturing in the country was rebounding less strongly than expected. But trading was fairly muted, ahead of the U.S. Labor Day holiday on Monday.

“It still seems though that traders remain reluctant to take on significantly new positions ahead of the long weekend in the U.S., especially so when there remains so much uncertainty in the air, and we are at the end of the week and the month,” said Michael Hewson, an analyst at CMC Markets UK.

On Thursday, lawmakers in the U.K. refused to authorize a British military intervention in Syria after an alleged chemical weapons attack near Damascus killed more than 300 civilians earlier this month. The surprise no-vote — which came after momentum seemed to be building inexorably toward military action — left uncertainty as to whether the U.S. and France would go ahead.

In afternoon trading in Europe, France’s CAC-40 closed Friday down 1.32 percent to 3,933, while the DAX in Germany pulled back 1.12 percent to 8,103. The FTSE index of leading British shares dropped 1.08 percent to 6,412.

Part of those declines were due to the release of data that showed the unemployment rate across the 17 nations using the euro stuck at its record high of 12.1 percent in July. The European Union rate of 11 percent also held steady.

In the U.S. trading also drifted lower after data showed U.S. consumer spending increased just 0.1 percent in July from the previous month, held back in part by steep government spending cuts that reduced federal workers’ salaries.

The Dow Jones industrial average was down 0.23 percent to 14,805, while the broader S&P 500 was down 0.25 percent to 1,634.

Earlier in Asia, the Nikkei 225 index closed down 0.5 percent at 13,388.86. But gains were posted elsewhere in Asia. Hong Kong’s Hang Seng rose 0.2 percent to 21,668.90. South Korea’s Kospi gained 1 percent to 1,926.36. Australia’s S&P/ASX 200 added 0.8 percent to 5,135.

Manufacturing in the world’s No. 3 economy rose 1.6 percent in July from a year earlier and 3.2 percent from the month before. While that pointed to an economic recovery, analysts had expected to see a 3.6 percent increase.

Energy prices, meanwhile, continued to retreat from a two-year high.

Benchmark oil for October delivery was down $1.31 to $107.41 per barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the euro was down 0.24 percent at $1.3205.

___

Associated Press Business Writer Pamela Sampson contributed to this report. Follow Sampson on Twitter at http://twitter.com/pamelasampson

blog comments powered by Disqus