NEW YORK, NY - MARCH 01: Traders work on the floor of the New York Stock Exchange (NYSE) on March 1, 2017 in New York City. Stocks surged on Wednesday sending the Dow Jones industrial average over 21,000 points. Spencer Platt/Getty Images/AFP == FOR NEWSPAPERS, INTERNET, TELCOS & TELEVISION USE ONLY ==
NEW YORK: US stocks opened lower on Monday amid losses across sectors as investors’ appetite for risk was curbed by geopolitical tensions in Asia and President Donald Trump’s accusation that his predecessor, Barack Obama, wiretapped him.
Some investors worried that the accusation could distract Trump from his economic agenda of introducing tax cuts and simplifying regulations, which have powered a record-setting rally on Wall Street since the election.
However, the lack of detail on Trump’s proposals and setbacks in filling his Cabinet have made investors jittery amid lofty market valuations.
The CBOE Volatility index, also dubbed Wall Street’s fear gauge, rose for the first time in four days.
“The market is susceptible to short-term swings and choppy behaviour predicated on something Trump says,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.
“Most investors are positive about the Trump administration. However, there is caution that something could be said by the administration that could derail the enthusiasm.”
The S&P 500 is trading at about 18 times forward earnings estimates against the long-term average of 15 times, according to Thomson Reuters data.
Rising geopolitical tensions in East Asia after North Korea fired four ballistic missiles also weighed on global stock markets.
At 9:40am ET (1440 GMT), the Dow Jones Industrial Average was down 71.65 points, or 0.34%, at 20,934.06, the S&P 500 was down 11.79 points, or 0.49%, at 2,371.33 and the Nasdaq Composite was down 29.37 points, or 0.50%, at 5,841.39.
All of the 11 major S&P sectors were lower. Financials, which gained the most in the post-election rally, took the biggest hit.
Among stocks, Netflix rose 2.3% to US$142.4 after UBS upgraded the stock to “buy” from “neutral”.
Albemarle was the biggest percentage loser on the S&P, with a 5% decline after Citigroup downgraded the lithium producer’s stock to “neutral” from “buy”.
Tyson Foods was down 3.2% at US$61.52 after a strain of bird flu was detected in a chicken breeder flock on a Tennessee farm contracted with the company.
Declining issues outnumbered advancers on the NYSE by 2,224 to 469. On the Nasdaq, 1,873 issues fell and 521 advanced.
The S&P 500 index showed five new 52-week highs and one new low, while the Nasdaq recorded 23 new highs and 19 new lows. - Reuters
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