Banks and other financial companies led U.S. stocks sharply lower in afternoon trading Wednesday as bond yields tumbled. Investors fretted that the latest turmoil in Washington could hinder President Donald Trump’s pro-business agenda. Technology and industrial stocks were among the big decliners, while real estate companies were up the most.
KEEPING SCORE: The Standard & Poor’s 500 index fell 31 points, or 1.3 percent, to 2,369 as of 1:48 p.m. Eastern Time. The Dow Jones industrial average slid 278 points, or 1.3 percent, to 20,701. The Nasdaq composite index gave up 112 points, or 1.8 percent, to 6,057, a day after closing at its latest record high. Small-company stocks fell more than the rest of the market. The Russell 2000 index sank 30 points, or 2.2 percent, to 1,364. Those companies would stand to benefit even more than large ones from corporate tax cuts Trump is proposing.
THE QUOTE: Investors are questioning whether or not President Donald Trump’s agenda can remain on track in light of the growing questions and allegations playing out in the media, said Quincy Krosby, market strategist at Prudential Financial.
“You could see gold was up, the dollar weakened and money went into the Treasury markets,” Krosby said. “As long as it seems as if the Trump agenda can be realized before the midterm election, it’s OK with the market, but once you introduce uncertainty into that trajectory, that’s something the market has to reassess.”
TRUMP JITTERS: A published report late Tuesday revealed that Trump allegedly made a personal appeal to now-fired FBI Director James Comey to drop the bureau’s investigation into former National Security Adviser Michael Flynn. The White House denied the report. Even so, the latest political drama unfolding in Washington weighed on markets, stoking concerns over how the potential fallout may affect the Trump administration’s ability to pass corporate tax cuts and other business-friendly reforms.
BANKS SLIDE: Several financial companies fell sharply as bond yields declined, which will mean lower interest rates on loans. Bank of America slid $1.28, or 5.3 percent, to $22.71. Citizens Financial Group gave up $2.39, or 6.4 percent, to $34.69. Comerica lost $3.97, or 5.6 percent, to $67.31.
BAD LOOK: American Eagle slumped 12.2 percent after the apparel retailer’s first-quarter earnings fell short of financial analysts’ expectations. The company, which blamed weak mall traffic, also issued second-quarter guidance that came in lower than analysts’ forecasts. The stock lost $1.59 to $11.38.
FASHION MISSTEP: Urban Outfitters slid 3.1 percent after the clothing and accessories retailer posted results that missed Wall Street’s estimates. The stock shed 64 cents to $19.82.
STRONG QUARTER: Target gained 1.8 percent after the retailer posted surprisingly strong earnings for the first quarter. The stock added 98 cents to $55.51.
JACKED: Jack in the Box climbed 5.6 percent after the restaurant chain’s latest quarterly results exceeded Wall Street’s forecasts. The company also said it would consider spinning off its Qdoba Mexican restaurant chain. The stock added $5.70 to $107.59.
TREASURY YIELDS: Bond prices rose. The 10-year Treasury yield fell to 2.22 percent from 2.33 percent late Tuesday.
CURRENCIES: Unease over the potential implications of the latest political fallout in Washington weighed on the dollar Wednesday. The euro strengthened to $1.1150 from $1.1095. Against the yen, the dollar was down to 111.09 yen from 113.03.
OIL: Benchmark U.S. crude was up 45 cents, or 0.9 percent, at $49.11 per barrel in New York. Brent crude, used to price international oils, was up 55 cents, or 1.1 percent, at $52.20 per barrel in London.
MARKETS OVERSEAS: In Europe, Germany’s DAX fell 1.4 percent. The CAC 40 in France slid 1.6 percent. The FTSE 100 index of leading British shares dipped 0.2 percent. Asian markets mostly fell. Japan’s Nikkei 225 dropped 0.5 percent, while South Korea’s Kospi dipped 0.1 percent. Hong Kong’s Hang Seng index slipped 0.2 percent.
