* S&P 500 closes under 100-day moving average
* Crude oil jumps on Middle East supply concerns
* Tiffany's falls after results, Goodyear up on labor
* Indexes down: Dow 1 pct, S&P 1.4 pct, Nasdaq 2 pct
By Ryan Vlastelica
NEW YORK, Aug 27 Wall Street stocks suffered
their worst day since June on Tuesday, slumping in a broad
decline as geopolitical uncertainty rose over a possible
U.S.-led military strike by the West against Syrian President
Bashar al-Assad's forces.
The S&P 500 closed under its 100-day moving average for the
first time since June 24, a sign of weak near-term momentum. The
day's fall extended recent declines on uncertainty over when the
U.S. Federal Reserve will start to slow its stimulative monetary
Odds grew that a strike would occur against al-Assad's
forces for a chemical weapons attack against civilians as a
number of nations and groups - including Britain, France, Canada
and the Arab League - joined Washington in urging a firm
response to Assad. Adding to the tension, Russia has supported
Assad Syria's civil war.
"This (stocks) move is as much about the potential spillover
effect in the region as it is the potential for a U.S. strike,"
said Leo Grohowski, chief investment officer at BNY Mellon
Wealth Management, adding that because geopolitical risk had
been "ratcheted up," portfolios would need to be reallocated
away from riskier investments like stocks.
"Doing that in a market that was already acting sloppy is
cause for further weakness," he said.
Investor nervousness was reflected in a jump of more than 20
percent in the CBOE volatility index over the last two
days. The uncertainty also lifted gold to a 15-week peak.
Western sources who attended a meeting in Istanbul between
envoys of an alliance opposed to Assad and the Syrian National
Coalition said "action to deter further use of chemical weapons
by the Assad regime could come as early as in the next few
Defense Secretary Chuck Hagel said U.S. military forces in
the region are "ready to go" should President Barack Obama order
action against Syria.
About 80 percent of companies traded on both the New York
Stock Exchange and Nasdaq fell, while all 10 S&P 500 sectors
Financials and materials were the weakest
of the day, with both falling about 2.5 percent. Both groups are
closely tied to the pace of economic growth, as are energy
shares. However, losses in that group were offset by a 2.8
percent rise in crude oil.
"The potential disruption of Middle East oil supply will not
only provide support for commodities, but this is a sector that
has underperformed, where valuations are compelling," said
Grohowski, who helps oversee $175 billion in client assets in
The Dow Jones industrial average was down 170.33
points, or 1.14 percent, at 14,776.13. The Standard & Poor's 500
Index was down 26.30 points, or 1.59 percent, at
1,630.48. The Nasdaq Composite Index was down 79.05
points, or 2.16 percent, at 3,578.52.
Tuesday marked the biggest daily decline for the S&P since
June 20. The benchmark index is now down 2.9 percent in August,
putting it on track for its worst month since May 2012.
Volume was light, with about 6.18 billion shares changing
hands on the New York Stock Exchange, the Nasdaq and NYSE MKT,
below the daily average of about 6.31 billion shares so far this
Goldman Sachs fell 3 percent to $153.23 a day after a
source said the company lost tens of millions of dollars after a
computer glitch led to a flood of erroneous options trades last
Shares of Tiffany & Co dipped 1 percent to $80.82
after it reported second-quarter sales that missed expectations,
although the jeweler raised its full-year profit view on strong
results in China.
Goodyear Tire and Rubber Co rose 2 percent to $19.01
as the S&P's biggest gainer after the company detailed a new
master labor contract.
U.S. regulators have asked Nasdaq OMX Group and
NYSE Euronext to come up with a timeline of Thursday's
three-hour trading disruption. But the rival exchange operators
have been unable to agree on the details, according to several
sources familiar with the situation
Shares of Nasdaq OMX fell 2.3 percent to $29.94 while NYSE
Euronext fell 1.2 percent to $41.81.