Investing.com – Wall Street opted for profit-taking on Wednesday as U.S. political developments kept investors on edge after President Donald Trump raised the specter of a government shutdown to fulfill a campaign pledge of building a wall at the U.S.-Mexican border.
At 11:13AM ET (15:13GMT), the Dow Jones fell 66 points, or 0.30%, the S&P 500 gave up 8 points, or 0.34%, while the Nasdaq Composite traded down 23 points, or 0.36%.
While Tuesday’s rally in stocks was attributed to heightened hopes for progress on tax reform, Trump later referred to his vow to build a wall at the border with Mexico and told supporters in Phoenix, "If we have to close down the government, we are building that wall."
Trump also warned that he might terminate the NAFTA trade treaty with Canada and Mexico after first round talks aimed at revamping the trade pact ended with few signs of progress.
On the economic front, data released Wednesday gave mixed readings.
A flash reading from IHS Markit showed that business activity hit a 27-month high in August, thanks to a further expansion service sector activity and despite a sluggish manufacturing sector activity.
On the other hand, new home sales unexpectedly tumbled 9.4% in July, hitting a seven-month low and dampening optimism over the state of the U.S. housing market.
In big moves on earnings, Lowe’s (NYSE:LOW) shares dropped more than 5% after the second largest U.S. home improvement retailer reported disappointing quarterly profit.
To the upside, American Eagle Outfitters (NYSE:AEO) soared nearly 7% after an unexpected jump in comparable sales pushed the clothing retailer’s top and bottom line past forecasts.
Meanwhile, oil recovered from earlier losses on Wednesday after official U.S. crude inventory data was released.
Though the drop in oil stockpiles was slightly less than hoped, gasoline inventories fell almost twice as much as expected, causing a sigh of relief that data from the American Petroleum Institute released on Tuesday missed the mark.
U.S. crude futures gained 0.42% to $48.03 by 11:15AM ET (15:15GMT), while Brent oil traded up 0.58% to $52.17.