News.com.au : US stocks lower on Iran tensions

US stocks lower on Iran tensions

From correspondents in New York | Agence France-Presse | August 22, 2006

US stocks were lower in morning trading on increased geopolitical tensions over Iran's nuclear program, but also as investors cashed profits on strong gains last week, traders said.

The Dow Jones Industrial Average was down 33.38 points (0.29 percent) at 11,348.09, while the Nasdaq index was 17.71 points (0.82 percent) lower at 2146.24.

The broad-market Standard and Poor's 500 index was down 4.07 points (0.31 percent) at 1298.23.

“There is a bit of reversal, but it's not that negative,” said Peter Cardillo, an analyst at SW Bach.

“The big story today is the geopolitical concerns. Iran may negatively impact the market,” Mr Cardillo said.

US President George W. Bush urged the United Nations to move swiftly to impose sanctions against Iran if it refuses to stop nuclear enrichment activities by a Security Council-imposed August 31 deadline.

Asked at a White House news conference whether he was confident the council would move quickly if Iran defied the decision of the international community, Mr Bush said, “I certainly hope so.

“There must be consequences if people thumb their nose at the United Nations Security Council. We will work with people on the Security Council to achieve that objective,” he said.

Washington believes Iran is trying to develop nuclear weapons, but Tehran denies such claims, saying its nuclear program is peaceful.

Aside from the renewed geopolitical jitters, traders said higher oil prices had also sapped some investor optimism.

“Rising crude oil prices reversing last week's steep declines are also altering the market's mood this morning,” said Dick Green, a senior analyst at Briefing.com

New York's benchmark oil futures contract, for September delivery, was up US46c at $US71.60 a barrel in late morning deals.

Oil prices had fallen last week as fears receded of a wider Middle East conflict, after a UN-brokered ceasefire deal appeared to ease the Israeli-Lebanon conflict.

However, crude prices rose Monday as the Security Council-imposed deadline on Iran's nuclear program nears.

Energy stocks were mixed. ExxonMobil's stock was up US58c at $US69.68 while Chevron was down US13c at $US67.13.