Thursday 24th August 2017 |
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Wall Street moved lower as US President Donald Trump’s threats to shut down the government if Congress does not fund a wall on the southern border revived concern about the administration’s ability to move ahead with plans for tax reform.
In 1.02pm trading in New York, the Dow Jones Industrial Average fell 0.2 percent, while the Nasdaq Composite Index slid 0.3 percent. In 12.47pm trading, the Standard & Poor’s 500 Index also fell 0.3 percent.
“If we have to close down our government, we’re building that wall,” Trump said Tuesday at a rally in Phoenix. “One way or the other, we’re going to get that wall.”
Wall Street's fear gauge—the CBOE Volatility Index or the VIX—jumped 5.7 percent to 12.00. US Treasuries rose, sending the yield on 10-year notes three basis points lower to 2.18 percent.
"Trump saying he would be willing to shut down the government over the wall obviously doesn't really inspire much confidence in anyone," Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut, told Reuters.
"The debt limit, which is truly urgent and something that needs to be addressed, where theoretically failure should not be an option, that is something of a litmus test for the market,” according to O’Rourke.
The Dow moved lower as slides in shares of Home Depot and those of Johnson & Johnson, down 1.4 percent and 1.1 percent respectively, outweighed gains in shares of United Technologies and those of IBM, up 1.7 percent and 1 percent respectively recently.
Shares of Lowe’s sank, down 6.1 percent as of 1.23pm in New York, after the company posted quarterly results that fell short of expectations and lowered its outlook for its operating margin growth.
Meanwhile, a Commerce Department report showed new US home sales unexpectedly fell in July, dropping 9.4 percent to a seasonally adjusted annual rate of 571,000 units, the lowest level since December.
“The third-quarter sales data are starting out significantly below the second-quarter average, and many other housing reports have also shown some recent weakening in their respective trends," Daniel Silver, an economist at JPMorgan in New York, told Reuters. “Today's report strengthens our conviction that real residential investment will decline in the third quarter.”
On Thursday central bankers from around the world gather for their annual meeting in Jackson Hole, Wyoming, where US Federal Reserve Chair Janet Yellen is scheduled to speak on Friday.
In Europe, the Stoxx 600 Index finished the session with a 0.5 percent decline from the previous close. The UK’s FTSE 100 Index closed little changed from the previous day, while France’s CAC 40 Index fell 0.3 percent, and Germany’s DAX Index slid 0.5 percent.
(BusinessDesk)
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