US stocks tumble, oil up, on Trump woes, Spain attack
Aug 18, 2017 08:12 AM GMT+0530 | 0 Comment(s)
AFP - US stocks fell sharply on Thursday as a deadly attack in Spain added to existing unease over President Donald Trump's agenda amid the latest controversy and the split with business leaders.
Wall Street stocks were in the red all session, initially due to anxiety over rumors White House economic advisor Gary Cohn would resign due to unhappiness over Trump's response to a violent rally by racist groups over the weekend. A White House source denied this.
US equity losses deepened on news that a driver deliberately slammed a van into crowds on Barcelona's most popular street in what police said was a "terror attack." At least 13 people were killed and 50 injured.
Bourses in Europe and Asia closed before the attack, and mostly fell on uncertainty following minutes from the European Central Bank meeting that showed concerns over the rising euro.
The broad-based S&P 500 fell 1.5 percent, and all 11 sectors of the index retreated, with financials and technology among the hardest hit.
Prior to the attack in Spain, markets were digesting news Trump had dissolved a pair of White House business advisory boards amid an exodus of CEOs outraged at Trump's comments on white supremacist and neo-Nazi groups involved in the violence in Virginia that killed one woman.
And the White House Thursday said Trump also has abandoned plans to form an advisory council on infrastructure.
Disbanding the CEO advisory boards, "created a lot of concerns for investors," said Adam Sarhan of 50 Park Investment.
"This is the first time since Trump took office there is a disconnect between him and the business community."
Sarhan said previous political shocks -- such as Republican failure to repeal the previous administration's health care laws or the nuclear brinkmanship with North Korea -- had not directly affected economic policy.
"This is the first time where we have a political event that directly impacts the economy. That is why stocks are selling off. It is not just noise."
A further blow came Thursday when top Republican Senator Bob Corker of Tennessee joined those in his party who have sharply criticized Trump.
"The president has not yet been able to demonstrate the stability nor some of the competence that he needs to demonstrate in order to be successful," Corker said, according to news accounts.
The S&P 500 volatility index, known unofficially as the "fear index," surged 32.5 percent.
The dollar retreated against the euro, although it recovered from session lows after the White House's denial about Cohn.
"Cohn is a key member of the administration who is determined to press forward with tax reform. If he resigns, it would send stocks crashing lower taking risk currencies down with it," said Kathy Lien, managing director at BK Asset Management.
- Key figures around 2115 GMT -
New York - Dow: DOWN 1.2 percent at 21,750.73 (close)
New York - S&P 500: DOWN 1.5 percent at 2,430.01 (close)
New York - Nasdaq: DOWN 1.9 percent at 6,221.91 (close)
London - FTSE 100: DOWN 0.6 percent at 7,387.87 points (close)
Frankfurt - DAX 30: DOWN 0.5 percent at 12,203.46 (close)
Paris - CAC 40: DOWN 0.6 percent at 5,146.85 (close)
EURO STOXX 50: DOWN 0.6 percent at 3,464.30
Tokyo - Nikkei 225: DOWN 0.1 percent at 19,702.63 (close)
Hong Kong - Hang Seng: DOWN 0.2 percent at 27,344.22 (close)
Shanghai - Composite: UP 0.7 percent at 3,268.43 (close)
Euro/dollar: DOWN at $1.1724 from $1.1766 at 2100 GMT
Pound/dollar: DOWN $1.2865 from $1.2891
Dollar/yen: DOWN at 109.57 yen from 110.19 yen
Oil - Brent North Sea: UP 76 cents at $51.03 per barrel
Oil - West Texas Intermediate: UP 31 cents at $47.09 per barrel