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The S&P500 shed 2% in the previous two trading sessions, as worries mounted over the possibility of a US military strike on Syria, with a 20% spike in the volatility index paying testament to the unease being felt by investors. The situation has normalised slightly today, with a modest stock-market rise and the volatility index slipping back 2%.
By early afternoon in New York, the Dow was trading up 0.45% or 67 points at 14, 843 and the S&P 500 had bounced 0.65% to 1641.2. The NASDAQ saw the worst falls out of the three main US stock indices yesterday and it has seen the biggest rebound today, climbing 0.83%.
Various media outlets are reporting that US officials have suggested a military strike against Syria could occur within the next few days. The biggest economic worry is that the conflict could spread beyond the confines of Syria and lead to widespread turmoil in oil-rich nations across the Middle East. These concerns have helped propel crude oil ever higher this week. Brent crude oil has hit a six-month high of over $117 a barrel, while US light crude oil is close to $110 a barrel today.
A report today from the National Association of Realtors showed its pending home sales index was 1.3% lower in July, with the combination of rising mortgage rates and house prices appearing to have dampened the market. Pending sales are those where a contract has been signed but a final sale has not yet gone through. Because of the lag between a contract being signed and closure of the deal, which can take a couple of months, this data points to a strong likelihood that final sales in August and September could be depressed.