Breaking News
0

Stocks sell off on Trump concern; dollar at Nov low

Stock MarketsMay 17, 2017 12:28PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A trader works on the floor of the New York Stock Exchange in New York

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks and the dollar dropped and bond prices rallied on Wednesday as investors fled risky assets amid uncertainty about U.S. President Donald Trump's ability to deliver on tax and regulatory reform.

Reports that Trump asked then-FBI Director James Comey to end a probe into the former national security adviser have raised questions over whether Trump tried to interfere with a federal investigation.

All three major U.S. stock indexes were down more than 1 percent. The S&P 500 was briefly on track for its worst day since Sept. 13, but pared some of those losses to put it on track for its biggest daily fall in about two months. The dollar index (DXY) has erased its post-election gains.

The news comes on the heels of a tumultuous week at the White House when Trump unexpectedly fired Comey and reportedly disclosed classified information to Russia's foreign minister about a planned Islamic State operation.

Optimism over pro-growth policies under Trump drove a sharp rally in U.S. stocks after the Nov. 8 U.S. election.

"We're getting into stall mode because of the early expectations for the Trump presidency. It's all being put well on the back burner and even off the stove. It's kind of worrisome as it could take time to muddle through this," said Joseph Benanti, managing director, senior sales trader at Rosenblatt Securities in New York.

The Dow Jones Industrial Average (DJI) was down 254.56 points, or 1.21 percent, to 20,725.19, the S&P 500 (SPX) had lost 27.87 points, or 1.16 percent, to 2,372.8 and the Nasdaq Composite (IXIC) had dropped 108.10 points, or 1.75 percent, to 6,061.77.

Both the Dow and S&P 500 fell below their 50-day moving averages for the first time since April 21.

Volatility spiked. The CBOE Volatility index (VIX) was up 2.8 points.

Bank stocks, which outperformed in the post-election rally, were the worst hit. The S&P 500 financial sector (SPSY) tumbled more than 2 percent, led by losses in Bank of America (N:BAC) and JPMorgan (N:JPM).

At nearly 18 times forward earnings, the S&P 500 trades at a significant premium to its long-term average valuations of 15 times, according to Thomson Reuters data.

MSCI's gauge of stocks across the globe (MIWD00000PUS) fell 0.9 percent, while European shares (FTEU3) ended down 1.4 percent.

Several money managers said they were not yet likely to make changes in their portfolio as a result of the latest White House news.

"We aren't likely to make major changes. We are already well positioned, but we need to think about a more negative scenario re tax reform versus what we were previously thinking," said Edward Perkin, chief equity investment officer at Eaton Vance.

The dollar index, which tracks the U.S. currency against six peers and had scaled a 14-year peak of 103.82 on Jan. 3, fell 0.4 percent to its lowest level since Nov. 9, surrendering all of its "Trump bump" gains.

U.S. Treasury yields fell, with benchmark 10-year notes (US10YT=RR) up 23/32 in price to yield 2.25 percent, the lowest level since April.

In commodity markets, safe-haven gold hit a two-week high, while oil prices were higher. Spot gold rose for a fifth day and was up 1.8 percent at $1,258.38 an ounce.

Brent crude (LCOc1) was up 1.6 percent at $52.49 per barrel, while U.S. light crude (CLc1) rose 1.4 percent to $49.34.

Stocks sell off on Trump concern; dollar at Nov low
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Michael Talley
Michael Talley May 17, 2017 2:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Lmao. Just randomly attach the President to anything negative. Real quality journalism
Reply
0 0
Hanna Christin
Hanna Christin May 17, 2017 2:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
To be fair, the main point here is that investors now have serious doubts over whether Trump will be able to push through his economic agenda, which seems reasonable, given the circumstances.. Also, it appears that Trump is finding it difficult to find anyone to defend him publicly against the new allegations, give that he has a history of undermining their efforts on his behalf. . The White House denied the report, but the press secretary and other officials have stayed silent so far on this......
Reply
0 0
Jose Figueroa
KikoCeiba77 May 16, 2017 9:42PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks Reuters. Looks like I'm gonna have a good week.
Reply
0 0
tony ooh
tony ooh May 16, 2017 8:49PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
let news corps like reuters make goofy headlines regarding president trump, and futures fall. then, i buy. i win. good for me.
Reply
0 0
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email