Wall Street ends day with heavy losses on risk aversion
|Major equity indexes in the U.S. dropped sharply on Thursday as investors moved away from riskier assets on rising concerns over the stability of the Trump administration and its ability to push through important policy changes such as the tax-reform or the infrastructure overhaul.
Market speculation of White House Economic Adviser Gary Cohn's possible resignation triggered a sell-off in the early NA session as he is seen as a key player who could help carry through the tax reform, which was the primary boost of the stock market's rally of 2017.
Commenting on today's market action, "continued problems with Republican leadership, inability to get anything done, and this latest wedge being driven between the president and Congress. Not helpful," Stephen Massocca, senior vice president, Wedbush Securities in San Francisco, told Reuters.
Moreover, investors' demand for safe-havens such as the U.S. Treasury-bonds, gold, remained high in the session after the news of a terrorist attack in Barcelona crossed the wires. A van drove through a crowded street in the center of Barcelona, killing at least 13 people and injuring at least 50 people, Catalan police said in a statement after the incident.
The Dow Jones Industrial Average lost 274.14 points, or 1.25%, to 21,750.73, the S&P 500 dropped 38.75 points, or 1.57%, to 2,428.75 and the Nasdaq Composite closed 106.54 points, or 1.68%, lower at 6,238.57.
Headlines from the U.S. session:
- Sen. Corker: Trump has not shown the "stability" or competence to be "successful"
- NY Fed survey: Several dealers see a lower probability of a third rate hike
- US Industrial Production: manufacturing output held back by motor vehicles - Wells Fargo
- Catalan govt. official: 13 dead, at least 50 injured in Barcelona van attack
- Fed's Kashkari: Very hard to see how US will achieve 3% growth
- A dovish Kaplan explained, "would like more progress on inflation before next hike"
- Cohn intends to remain in his position as NEC director - WH official - Reuters
- US: Industrial production rose 0.2% in July following an increase of 0.4% in June
- Philly Fed: Manufacturing conditions in the region continued to advance in August
- US: Weekly initial claims was 232,000, a decrease of 12,000 from previous week
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