August 26, 2013 / 11:48 AM / 5 years ago

Wall Street ends lower after Kerry blasts Syria on chemical weapons

NEW YORK (Reuters) - U.S. stocks fell in light volume on Monday after U.S. Secretary of State John Kerry called Syria’s use of chemical weapons “undeniable.”

Traders work on the floor of the New York Stock Exchange August 21, 2013. REUTERS/Brendan McDermid

In a kneejerk reaction to Kerry’s strong words against Syria, major U.S. stock indexes gave up their gains and turned negative in the last hour of trading. Stocks had traded higher for most of the session, as sharply weaker orders for long-lasting manufactured goods eased investors’ worries of a cutback in the Federal Reserve’s economic stimulus.

“The turnaround (in stocks) is probably a reaction to Secretary of State Kerry’s comments. We are seeing signs of escalation here and geopolitical concerns are trumping,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Kerry said on Monday that the evidence of a massive deadly chemical attack last week was “undeniable” and accused the Syrian government of trying to cover it up, signaling the U.S. was edging closer to a possible military response.

After the bell, shares of J.C. Penney (JCP.N) fell more than 2 percent on news that hedge fund manager William Ackman, the single biggest shareholder in the retailer, is selling his stake.

Ackman’s $11 billion Pershing Square Capital Management is offering its roughly 39.1 million shares for sale and used Citigroup as the bookrunner for the deal, a person familiar with the deal said. J.C. Penney also issued a regulatory filing.

The move comes two weeks after the 47-year-old billionaire left the retailer’s board after a fight over top management’s direction. Ackman built his stake in J.C. Penney three years ago and has lost hundreds of millions on the investment as an ambitious makeover of the store failed.

The Dow Jones industrial average .DJI ended down 64.05 points, or 0.43 percent, at 14,946.46. The Standard & Poor's 500 Index .SPX was down 6.72 points, or 0.40 percent, at 1,656.78. The Nasdaq Composite Index .IXIC was down 0.22 points, or 0.01 percent, at 3,657.57.

Amgen Inc (AMGN.O) was among the biggest gainers both on the S&P 500 and Nasdaq 100 .NDX indexes after it struck a deal to buy cancer drug maker Onyx Pharmaceuticals Inc ONXX.O for about $10.4 billion, sweetening its original offer made in June.

Onyx shares rose 5.6 percent to $123.49 and Amgen jumped 7.7 percent to $113.75.

Earlier, data showed U.S. durable goods orders dropped 7.3 percent in July, the biggest decline in nearly a year. In addition, a gauge of planned business spending on capital goods tumbled, casting a shadow over the economy early in the third quarter.

Trading volume was light at only around 4 billion on the New York Stock Exchange, NYSE MKT and Nasdaq, below the year’s daily average of 6.31 billion shares.

Declines pulled ahead of advances on the NYSE by 1,763 to 1,241. On the Nasdaq, declines beat advances 1,361 to 1,135.

Reporting by Angela Moon; Editing by Kenneth Barry and Dan Grebler

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