NEW YORK (AFP) - US stocks closed sharply lower on Monday after Secretary of State John Kerry warned that the United States would demand "accountability" after an "obscene" chemical weapons attack on Syrian civilians.
The Dow Jones Industrial Average shed 64.05 points (0.43 per cent) at 14,946.46.
The broad-market Standard & Poor's 500 index fell 6.72 (0.40 per cent) to 1,656.78 and the tech-rich Nasdaq Composite slipped 0.22 (0.01 per cent) to 3,657.57.
The markets ended firmly in the red after trading solidly higher for most of the day, but volumes were very low.
The sell-off came immediately after Mr Kerry said the US was still examining evidence of the use of chemical weapons in Syria but left no doubt that Bashar al-Assad's regime would be blamed.
The top US diplomat said President Barack Obama would demand accountability for this "moral obscenity." Stocks were under modest pressure after the Commerce Department reported new orders for durable manufactured goods plunged 7.3 per cent in July, much sharper than the 5.0 per cent drop expected.
"Traders continue to grapple with whether the US economy is strong enough to facilitate tapering of asset purchases by the Federal Reserve, which is set to meet in September," said Charles Schwab & Co said.
But a spate of corporate activity sparked investor interest in the last week of summer before the long Labor Day weekend.
Shares in biotech giant Amgen soared 7.7 per cent after it announced a US$10.4 billion (S$13.3 billion) deal to buy cancer-drug specialist Onyx Pharmaceuticals. Amgen sweetened its prior bid by US$4 per share to $125. Onyx leaped 5.6 per cent to US$123.49.
Anadarko Petroleum rose 1.4 per cent after unveiling the sale of a 10 per cent stake in an offshore Mozambique natural gas field to India's energy giant ONGC for US$2.64 billion. Anadarko said it would use the proceeds from the sale to accelerate exploration and development projects in the US and the Gulf of Mexico.
Chinese software firm Qihoo 360 Technology jumped 7.8 per cent after reporting breakneck growth in second-quarter profits and revenues.
"Our PC security products already cover nearly 95 per cent of Chinese PC Internet users, and our mobile security solutions cover approximately 70 per cent of Chinese smartphone users, making Qihoo the indisputable leader in Internet security in China," Hongyi Zhou, the firm's chairman and chief executive, said in a statement.
Home-improvement retailer The Home Depot gained 2.1 per cent, the strongest of the 30-stock Dow's four gainers.
Procter & Gamble was the laggard, falling 1.8 per cent. Microsoft shed 1.7 per cent, paring its 7 per cent-plus gain on Friday on news that chief executive Steve Ballmer will retire in 12 months.
Bond prices rose. The yield on the 10-year US Treasury bond fell to 2.80 per cent from 2.82 per cent on Friday, while the 30-year dropped to 3.78 per cent from 3.80 per cent. Bond prices and yields move inversely.