Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. September 22, 2016. REUTERS/Brendan McDermid
NEW YORK: Wall Street fell on Monday as investors hunkered down for the first US presidential debate between candidates Hillary Clinton and Donald Trump.
The race for the White House has so far had little discernible effect on the sentiment but that may change if Monday’s encounter leaves a decisive winner.
With just over six weeks until the Nov 8 vote, some investors see the neck-and-neck contest sparking volatility in sectors including health insurers, drugmakers and industrials.
“Wall Street favours Hillary at this point because she is a known commodity. Trump is a wild card,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “But I don’t think it’s too late for Wall Street to warm up to Trump.”
Many view a potential Clinton presidency as negative for pharmaceutical companies because of criticisms she has made about high drug prices.
Trump has promised to dismantle the Affordable Care Act, which has boosted health insurers since 2010.
Pfizer fell 2.39% after it decided against splitting into two. The stock was the biggest drag on the S&P 500 healthcare index, whose 1.6% decline was the steepest among the nine declining S&P sectors.
Deutsche Bank’s US-listed shares fell as much as 7.9% to a record low of $US11.83 and triggered declines among big Wall Street banks after a German magazine said Chancellor Angela Merkel had ruled out state assistance for the lender.
The bank said it did not need the German government’s help with a US$14bil US demand to settle claims it missold mortgage-backed securities.
At 2:28 pm ET, the Dow Jones industrial average was down 0.8% at 18,115.58 points and the S&P 500 had lost 0.74% to 2,148.74.
The Nasdaq Composite dropped 0.79% to 5,263.67.
“Investors are acting extremely nervous with regards to the debate ... and it highlights the fact that the markets are not focusing on the health of the economy, interest rates and geopolitical events,” said Robert Pavlik, chief market strategist at Boston Private Wealth.
The CBOE Market Volatility index, also known as Wall Street’s “fear gauge”, rose 16.84 percent, clocking its biggest percentage gain in two weeks.
Declining issues outnumbered advancing ones on the NYSE by a 2.05-to-1 ratio; on Nasdaq, a 2.65-to-1 ratio favoured decliners.
The S&P 500 posted 2 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 50 new highs and 29 new lows. - Reuters
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