Wall Street took a sharp turn into the red after Russian President Vladimir Putin reportedly said the country will assist Syria if there is an external attack.
As of 10:01 a.m. ET, the Dow Jones Industrial Average dropped 113 points, or 0.76%, to 14822, the S&P 500 fell 9.8 points, or 0.59%, to 1645 and the Nasdaq Composite skidded 26.6 points, or 0.72%, to 3631.
The markets opened the day solidly higher, but took a sharp downturn just before 10:00 a.m. ET. Traders pinned the sudden drop on comments from Putin saying the country is prepared to back Syria. This comes as Congress is mulling a joint resolution to give President Barack Obama the authority to strike Syria for its alleged use of chemical weapons on civilians.
On the economic front, traders widely see the August jobs report as one of the most important readings in recent memory as the Federal Reserve crafts its plans to begin paring back its vast bond-buying program.
The Labor Department said the U.S. economy added 169,000 jobs in August, missing economists’ expectations of 180,000. The jobless rate fell to 7.3%, the lowest since December 2008, and less than estimates that it would hold steady at 7.4%.
The labor force participation rate, which gauges the proportion of population in the labor force, fell to 63.2% from 63.4% in July, the lowest since August 1978.
Peter Boockvar, chief market strategist at The Lindsey Group, told clients that “bottom line, the pace of labor gains remain mediocre with the 8 month average being 180k and is just 148k over the past three months.”
Weighing in on the Fed’s plans, Goldman Sachs told its clients that “while the August employment report was a moderate disappointment, we believe it is probably not weak enough to prevent the FOMC from tapering in September.”
The investment bank added, however, “it does raise the likelihood of a ‘dovish taper,’ which could include a small size of the overall adjustment to purchases, and which we think would likely coincide with an enhancement of the forward guidance.”
Meanwhile, Todd Schoenberger, managing partner at LandColt Capital, said the data blurs Wall Street’s forecast of when exactly the Fed will begin paring back its bond purchases.
“The uncertainty factor has been ratcheted up a notch as Wall Street received little closure with the ongoing ‘Fed taper’ argument,” he said. “Chairman Bernanke and Co. may have missed their window to taper in the second quarter when the country had better GDP rates and jobs data to work from.”
Elsewhere, U.S. crude oil prices climbed 56 cents, or 0.54%, to $108.96 a barrel. Wholesale New York Harbor gasoline rose 0.35% to $2.846 a gallon. In metals, gold fell $3, or 0.22%, to $1,370 a troy ounce.
There was little in the way of corporate news on the day. However, market participants were eyeing what could reportedly be a record bond sale in the near future by Verizon Communications (VZ) to fund its $130 billion buy of the remaining 45% stake in Verizon Wireless from Vodafone (VOD).
The Euro Stoxx 50 dipped 0.02% to 2774, the English FTSE 100 fell 0.1% to 6526 and the German DAX fell 0.18% to 8220.
In Asia, the Japanese Nikkei 225 sold off by 1.5% to 13861 and the Chinese Hang Seng rose 0.1% to 22621.