The Street reacted negatively to the latest crisis enfolding the White House and recorded the biggest one-day loss for the year. All three major indices slid sharply as hopes for the business-friendly regulatory and tax agenda recedes with the latest debacle engulfing the White House.
The Dow plunged 373 points to 20,606.93 and Nasdaq ends its record rally falling -2.51% to close at 5,580.
- Dow Jones Index 20,606.93 -1.78%
- S&P 500 2357.03 -1.82%
- Nasdaq 5,580 -2.51%
- Russell 2000 1355.89 -2.78%
- NYSE Composite 11606.49 -0.07%
- Gold 1260.00 +0.06%
- Oil 49.07 0.08%
Financials and tech stocks were battered on the big board. Amongst the losers were Goldman Sachs which dropped -5.26% to $213.71 and JPMorgan Chase (-3.89% to 84.20) as investors exited and fled to less risky investments.
Moving up notches were UnitedHealth Group (168.86 +0.44%) and Travelers Inc, insurance group (+0.27% to 120.25)
Apple also fell -3.36% to $150.25. Cisco Systems reported a loss in quarterly revenue as a result of further declines in its router business and fell -8.56% to close at $31.36.
Investors are factoring in those sectors dependent on a strong economy as well as rising interest rates and disappointing results.
Investor confidence has clearly ebbed on the latest revelation that President Trump asked James Comey to call off an investigation on the former national security adviser, Michael Flynn.
Investor had been sanguine in the face of political uncertainty but with the spectre of impeachment bandied around by members of Congress is causing flight to other safe habour assets.
Gold finished 1.8% higher at $1,258.70. The yield on 10-year Treasury bonds dropped to its lowest in three weeks to 2.22% due to investor demand.
U.S. Bank investment group head Lisa Kopp on Reuters TV says managing all this news is going to be a headache for Trump and his team: "That will hamper potentially moving forward with his agenda in two ways. So, one is obviously the amount of time that he is having to spend on these additional issues, and longer-term it could potentially reduce, obviously, his bargaining and negotiating power."
Dollar loses its post-election gains and was weaker against other currencies.
The fear gauge as the Chicago Board Options Exchange volatility index, or VIX is known, read higher at 46% to 15.59 on Wednesday, the biggest increase since Brexit although it remains below its historical average.