US stocks fall after Putin says Russia will assist Syria

Comments from Putin, who is already aiding Syria with arms shipments, erase earlier market gains

Published September 6, 2013 2:27PM (EDT)

Sept. 6 (Bloomberg) -- U.S. stocks fell after Russian President Vladimir Putin said his country will assist Syria if strikes are launched, erasing earlier gains amid a slower-than- forecast rise in employment.

The Standard & Poor’s 500 Index fell 0.4 percent percent to 1,648.38 at 9:54 a.m. in New York. The Dow Jones Industrial Average dropped 85.83 points, or 0.6 percent, to 14,851.65. Trading in S&P 500 stocks was 31 percent higher than the 30-day average at this time of day.

Russia is already aiding Syria with arms shipments, Putin told reporters in St. Petersburg after the Group of 20 summit. A U.S. Senate panel this week authorized President Barack Obama to conduct a limited military operation against the regime of Bashar al-Assad. The full Senate will begin to discuss the president’s plans when it reconvenes on Sept. 9.

The comments from Putin erased an earlier gain in the S&P 500 of as much as 0.4 percent. The gauge advanced after slower- than-forecast jobs growth eased concern about the size of potential Federal Reserve stimulus cuts.

Fed policy makers have been weighing data to determine whether the economy is strong enough for it to scale back the pace of its $85 billion in monthly bond buying. The Fed said Sept. 4 that the economy maintained a modest to moderate pace of growth.

A Labor Department report today showed employers added 169,000 workers last month following a revised 104,000 rise in July that was smaller than initially estimated. The median forecast of 96 economists surveyed by Bloomberg called for an August increase of 180,000. The unemployment rate unexpectedly fell to 7.3 percent as more people left the labor force.

'Relatively Soft'

“It’s a relatively soft report,” John Canally, investment strategist at Boston-based LPL Financial Corp., which has $373 billion in advisory and brokerage assets, said in a phone interview. “It’s still in a range of Fed tapering. This would push close to taper-light, where they’ll just maybe do $10 billion and wait, rather than doing more.”

The FOMC this month will probably begin to reduce its bond buying, according to 65 percent of economists surveyed by Bloomberg. Its first step may be small, with monthly purchases tapered by $10 billion to a $75 billion pace, according to the median estimate in a survey of 48 economists conducted Aug. 9-13.

Fed Bank of Chicago President Charles Evans, a voter on policy this year, said today the central bank shouldn’t taper until inflation and economic growth pick up. Richard Fisher, the Fed Bank of Dallas president, said yesterday that the central bank must ensure its program doesn’t disrupt financial markets.

Fed Pledge

The Federal Open Market Committee pledged in December 2012 to keep interest rates near zero at least as long as unemployment exceeds 6.5 percent and inflation doesn’t rise above 2.5 percent. The FOMC gathers on Sept. 17-18.

“We’re still on the path of tapering,” Ron Florance, deputy chief investment officer for Wells Fargo Private Bank, which oversees $170 billion, said by phone from Scottsdale, Arizona. “It doesn’t change the timing of it, I think it changes the size of it. I think it may give them an excuse for a smaller taper.”

The Fed stimulus has helped drive a global equity rally, with the S&P 500 rising more than 150 percent from its bear- market low in 2009. The U.S. gauge has fallen 2.8 percent since its Aug. 2 record as speculation grew that the Fed would begin winding down its monetary support.

The S&P 500 rose for a third day yesterday amid data showing service industries expanded in August. The gauge has added 1.4 percent so far this week, rebounding from the worst month since May 2012.


--With assistance from Tom Stoukas in Toronto. Editors: Jeremy Herron, Jeff Sutherland

To contact the reporters on this story: Lu Wang in New York at; Nick Taborek in New York at

To contact the editor responsible for this story: Andrew Rummer at





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Bloomberg Economy Russia Stock Market Stocks Syria Vladimir Putin