PARIS (Reuters) – The New York Stock Exchange opened lower on Monday, with market attention focused on the conflict between Israel and Palestinian Hamas which could destabilize the entire region, causing an influx into safe haven assets.
In early trading, the Dow Jones index lost 22.14 points, or 0.07%, to 33,385.44 points and the broader Standard & Poor’s 500 fell 0.46% to 4,288.62 points.
The Nasdaq Composite lost 1.13%, or 151.23 points, to 13,280.10.
Clashes continued on Monday between the Israeli army and Hamas fighters and while Israel, which is preparing a major offensive, called up 300,000 reservists, a mobilization never before achieved, two days after the surprise attack of the Palestinian group .
US Defense Secretary Lloyd Austin said the United States would send several military ships and planes to Israel as a show of support.
A sign of fear, the CBOE volatility index on Wall Street climbed 7.10% to 18.69 points.
Traditional safe-haven assets such as gold (+0.67%) and the US dollar (+0.11%) are increasing, while the fear of an escalation of the conflict which could disrupt the production of certain countries in the region jump oil prices by more than 3%.
“We expect near-term volatility in the stock and oil markets as investors digest heightened tensions in the Middle East,” comments James Demmert, chief investment officer at Main Street Research.
Oil companies Chevron, Exxon Mobil, Marathon Oil and Occidental Petroleum advanced from 2.49% to 3.42%.
United Airlines, Delta Air Lines and American Airlines, which suspended their direct flights to Tel Aviv, fell from 4.56% to 4.94% amid fears that the surge in oil prices could weigh on airlines.
The conflict, on the other hand, benefits defense groups like Northrop Grumman (+8.53%), RTX (+3.84%), General Dynamics (+5.39%) and Lockheed Martin (+7.21%).
In other business news, Tesla fell 2.62% after a drop in its vehicle sales in China in September.
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(Writing by Claude Chendjou, edited by Kate Entringer)
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