Soft data, Syria strikes hit U.S., European markets

Last Updated Sep 23, 2014 1:28 PM EDT

NEW YORK - U.S. stocks were mostly lower and European stocks sank Tuesday following some disappointing economic reports and news that U.S.-led forces have started airstrikes against Islamic State militants in Syria.

The Dow Jones industrial average lost 79 points to 17,094 as of 1:24 p.m. ET. The Standard & Poor's 500 index lost seven points to 1,987 and the Nasdaq composite lost 11 points to 4,517.

In Europe, the damage was far more noticeable. France's CAC 40 lost 1.9 percent, Germany's DAX sank 1.6 percent and Britain's FTSE 100 fell 1.4 percent.

The tone in global financial markets was negative. European stocks were hurt by a report that showed that the economy of the 18-country eurozone is failing to find any renewed momentum. In its monthly survey, financial information company Markit said its eurozone purchasing managers' index, a closely watched gauge of business activity, fell to a nine-month low in September.

Further weighing on investors' sentiment was news that the U.S. and five Arab nations attacked the Islamic State group's headquarters in eastern Syria in nighttime raids. Land- and sea-based U.S. aircraft as well as Tomahawk cruise missiles launched from two Navy ships in the Red Sea and the northern Persian Gulf were used.

"The escalation of the conflict will of course raise questions over the risk appetite of many within the markets, who are no doubt worried about a major war which appears to be unfolding," said Joshua Mahoney, research analyst at Alpari.

Health-care stocks were among the biggest decliners in the U.S. after the Treasury Department announced new regulations that would discourage corporate "inversions," deals where a company merges with an overseas competitor to legally move its headquarters out of the U.S. to avoid paying high U.S. corporate tax rates. Health-care companies have been among the most active in makings those kinds of deals.

Medtronic and AbbVie, both of which have been considering inversion deals, fell. Medtronic lost $2.22, or 3.4 percent, to $63.78 and AbbVie fell 97 cents, or 1.6 percent, to $57.75.

CarMax fell $4.93, or 9 percent, to $47.88. The car dealer reported an adjusted profit of 64 cents a share, which missed the 67 cents per share that analysts had been looking for.

The euro was flat at $1.286 while the dollar rose 0.1 percent to 108.86 yen. In oil markets, a barrel of benchmark U.S. crude rose 88 cents to $91.75. U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.55 percent.