US stocks hit after Trump’s statements
US STOCKS lost ground yesterday as investors digested President Donald Trump’s protectionist statements and sought safe-haven assets such as gold and US Treasury bonds.
Trump, who met with a dozen prominent American manufacturers at the White House, said he would slash regulations and cut corporate taxes to boost the economy.
He, however, reinforced his stance of putting “America first” by warning manufacturers of penalties if they moved production outside the country.
The Trump trade, which led Wall Street to repeated highs since the election, has unravelled in recent weeks as investors fret about the potential impact of his isolationist stance on world trade and the lack of clarity on his policies.
“The market wants… more definitive statements like how healthcare and tax reforms get played out,” said Robert Pavlik, the chief market strategist at Boston Private Wealth.
At 10:55am ET, the Dow Jones Industrial Average was down 65.9 points, or 0.33 percent, at 19 761.35, the Standard and Poor’s (S&P) 500 fell 9.93 points, or 0.43percent, at 2261.38 and the Nasdaq Composite was down 22.81 points, or 0.41percent, at 5532.52.
Trump made it clear that he planned to hold talks with leaders of Canada and Mexico to renegotiate the North American Free Trade Agreement (Nafta) and intended to withdraw from the 12-nation trade pact of the Trans-Pacific Partnership.
The dollar hit a six-week low yesterday, while prices of safe-haven gold rose for the third consecutive day. Oil prices fell about 1 percent on signs of strong US drilling activity. The S&P energy index hit its lowest level since November 30. Eight other S&P sectors were also lower. Safe-haven stocks utilities and real-estate were the outliers.
Qualcomm dropped 13.4 percent to $54.44 (R738) after Apple filed a $1 billion lawsuit against the chip supplier last Friday. Qualcomm was the biggest drag on the S&P and the Nasdaq, while Apple’s stock was flat. Halliburton fell 3.4percent after it reported a bigger loss in the latest quarter.
Shares of Autozone, Advance Auto Parts, O’Reilly fell between 2.5 percent and 4.8 percent after the NY Post said Amazon.com might start selling car parts. The online retailer’s stock was up 0.1percent.
Declining issues outnumbered advancers on the NYSE by 1 494 to 1 313. On the Nasdaq, 1 725 issues fell and 910 advanced. The S&P 500 index showed 13 new 52-week highs and six new lows, while the Nasdaq recorded 55 new highs and 28 new lows.