US stocks tumbled to a 19-month low as the turmoil in Washington kept investors on edge after the worst week for American equities in almost a decade.
new york — US stocks tumbled to a 19-month low as the turmoil in Washington kept investors on edge after the worst week for American equities in almost a decade.
The S&P 500 slid for a fourth straight day, edging ever closer to a bear market as Treasury Secretary Steven Mnuchin unnerved investors by calling a crisis meeting with financial regulators.
The move looked to undermine his attempt to assure financial markets that the president won’t move to oust the head of the Federal Reserve. Traders also assessed the threat to the economy from a government shutdown that looks set to persist into the new year.
Mnuchin’s steps to placate markets came after the worst week for American equities in nearly a decade. The S&P 500 is down 17 percent from its record and on track for the steepest quarterly drop since the financial crisis.
At 1525GMT, the Dow Jones Industrial Average was at 22,124.44, down 1.4 per cent after earlier sliding two percent. The broad-based S&P 500 fell 1.3 per cent to 2,384.14, while the tech-rich Nasdaq Composite Index shed 1 per cent to 6,270.13.
“The reality is, in Washington you have this massive amount of unpredictability, Chad Morganlander, portfolio manager at Washington Crossing Advisors, said on Bloomberg TV. That combines with concerns over global growth and removal of stimulus gives investors this level of chill where they’re going to compress multiples regardless of what the backdrop in 2020 will be, he said.
There appears to be a whole lot of happenings on the political side of things in the US, not cutting any slack for the battered stock market
Jingyi Pan, IG Group
Asia mixed
Asian stocks were mixed with light trading on Monday as a Wall Street slump and a partial US government shutdown stemmed holiday cheer.
South Korea’s Kospi dropped 0.3 per cent to 2,055.78 while the Shanghai Composite index was less than 0.1 per cent higher at 2,516.84. Hong Kong’s Hang Seng lost 0.4 per cent to 25,651.38. Australia’s S&P ASX 200 added 0.5 per cent to 5,493.80. Stocks fell in Taiwan and Singapore but rose in Thailand. Markets in Japan, Indonesia and the Philippines were closed.
“Holiday thinned trade is to be expected for the markets open this Monday with the risk aversion set to continue,” Jingyi Pan of IG said in a commentary. “There appears to be a whole lot of happenings on the political side of things in the US, not cutting any slack for the battered stock market,” she added.
The dollar weakened to 111.09 yen from 111.22 yen in late trading on Friday. The euro rose to $1.1388 from $1.1372.