US STOCKS-Selling pressure recedes after rout, Syria in focus

Wed Aug 28, 2013 8:22am EDT

* Brent crude at 6-mo high, WTI at highest since 2011

* Britain to seek UN Security Council go-ahead on Syria

* Pending home sales data due

* Futures: Dow off 9 pts, S&P down 1 pt, Nasdaq up 3 pts

By Rodrigo Campos

NEW YORK, Aug 28 (Reuters) - U.S. stock index futures were little changed Wednesday as selling pressure abated following stocks' worst day since June as the United States and its allies appeared ready to strike Syria in response to an alleged chemical weapons attack on civilians.

Wall Street has fallen for two days on Syrian concerns, since U.S. Secretary of State John Kerry's remark late Monday that Syria's use of chemical weapons was "undeniable."

Investors worry about rapidly rising energy costs as a result of the impending conflict and their impact on the consumer, and that progress in efforts to rein in the U.S. deficit may begin to reverse, said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

"The market has reset to a lower level to reflect that," Meckler said. "The expectation is (a move on Syria) will be contained but only the actual action and reaction will determine that. The biggest fear here is a much wider conflict."

The United Nations Security Council was set for a showdown on Wednesday after Britain sought authorization for Western military action against Syria that seems certain to be vetoed by Russia and probably China.

Energy shares could be in focus as Brent crude hit a six-month high and U.S. crude hit its highest in more than two years on concerns the conflict may further destabilize the Middle East.

Gold prices rose to 3-1/2 month highs above $1,430 an ounce as the Syria tensions raised its appeal as a safe-haven asset.

S&P 500 futures fell 1 point and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 9 points, and Nasdaq 100 futures added 3 points.

The S&P 500 index has fallen 2 percent in the past two days and the CBOE Volatility Index has risen 20 percent, reflecting investor uncertainty.

U.S. government housing finance authorities are pressing JPMorgan Chase & Co for at least $6 billion to settle lawsuits over bonds backed by subprime mortgages, according to a person familiar with the matter.

Shares of mining equipment manufacturer Joy Global fell 3.5 percent in premarket trading after it reported a lower profit for the third quarter and said orders fell.

The National Association of Realtors issues Pending Home Sales for July at 10:00 a.m. EDT (1400 GMT). Economists in a Reuters survey expect a 0.5 percent drop compared with a 0.4 percent decrease in June.

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