Stocks slide as Washington turmoil reaches Wall Street

Jay Anderson
May 19, 2017

It's a classic flight to safety bet.

The Dow Jones Industrial Average closed down two points, or 0.01%, to 20,980, and the S&P 500 lost two points, or 0.07%, to 2,401, easing from an intraday record high of 2,406. The Nasdaq Composite Index slumped 2.6% from its all-time high to 6011.24 and the Standard & Poor's 500 Index shed 1.8% to 2357.03.

"I would agree with Josh that Mike Pence, if he were to become president - and I said this yesterday - would be a more effective champion of those stimulus measures that would, in fact, help the economy grow further and support the stock market", Insana said. The Stoxx Europe 600 Index fell 1 percent, after ending little changed in the previous session.

"Market participants figure that there is virtually no chance of any USA company tax cuts getting through the Congress while President Trump is defending the allegations of an obstruction of justice - an impeachable offence", Commonwealth Bank of Australia (OTCPK:CMWAY) said in a note on Thursday.

The sell-off snapped an unusually long period of calm after the market had hit a series of record highs. The S&P began the session by opening 0.74 percent lower, the largest gap down since March 30, 2009, when the index suffered a 0.84 percent drop at the start of trading. A volatility gauge on the S&P 500 climbed 10 percent after jumping 2.2 percent on Tuesday. London's FTSE 100 was last seen down 1.1%, as the pound rose following a sharp bounce in retail sales last month.

June 2017 3-year bond futures contract at 98.21 (implying a yield of 1.79pct), unchanged from Wednesday.

The New York Times reported Tuesday that Trump asked former FBI director James Comey to halt the FBI's investigation into former National Security Adviser Michael Flynn.

One reason that the markets may not be in full blown panic mode about the latest crisis du jour in Washington is because they may be already anticipating the possibility that Trump will not serve a full term in the White House.

Soundgarden singer Chris Cornell dies at age 52 in Detroit
That same year, Cornell and Soundgarden collaborated with eventual members of Pearl Jam to form the supergroup Temple of the Dog. In interviews , Cornell discussed his past struggles with alcohol and the impact of his friends' deaths from substance abuse.

Investors have been shaken by reports that Trump urged the then-FBI chief Comey to drop his investigation into Michael Flynn, the latest twist in the Russian Federation saga that is gradually engulfing the President.

The 10-year Treasury yield sank to 2.22 percent in its steepest decline since July.

The CBOE Volatility Index (VIX - 15.59) surged 4.9 points, or 46.4%, for its highest close since April 13. Investors shifted into US government bonds, pushing yields lower, and into gold.

METALS: The price of gold jumped 1.8 percent, climbing $22.30 to settle at $1,258.70 per ounce.

The major USA indexes had also fallen dramatically Wednesday amid questions about President Donald Trump's ability to implement his pro-business policies such as lowering corporate taxes.

Banks are leading USA stock indexes sharply lower in midday trading as bond yields fall, which will mean lower interest rates on loans.

Financial stocks in the S&P 500 were hardest hit with Bank of America and Morgan Stanley both falling 6%.

Unease over the potential implications of the latest political fallout in Washington also weighed on the dollar. The euro strengthened to $1.1150 from $1.1095.

Other reports by BadHub

Discuss This Article