Tech losses sink Wall Street, oil falls on U.S. production fears

Updated: Wed, Mar 14, 2018
12:48 am
Reuters
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U.S. and European stock indexes slid on Tuesday as investors reacted to U.S. President Donald Trump`s ouster of Secretary of State Rex Tillerson, with the dollar and crude oil prices following suit.

Losses in technology stocks drove dips in the U.S. equity market, while oil prices - which lately have trended in tandem with equities - fell by as much as 1.8 percent before regaining some ground, hurt by concerns over rising U.S. production.

Trump gave Tillerson the boot on Tuesday after a series of public rifts over policy on North Korea, Russia and Iran, and replaced his chief diplomat with loyalist Central Intelligence Agency Director Mike Pompeo.

The move had contributed to a volatile morning across asset classes, but markets were trending decidedly in the red by the afternoon.

U.S. crude fell 1.35 percent to $60.53 per barrel and Brent was last at $64.40, down 0.85 percent on the day.

Investors initially saw Tillerson`s firing as a sign that a deal on Iran`s nuclear programme could collapse, potentially cutting Iran`s oil output, which supported prices. Fears about rising U.S. production were of more concern later in the day.

"There’s no stopping us and OPEC`s frustration levels are going to grow," said Phillip Streible, senior market strategist at RJO Futures in Chicago, referring to efforts by major producers to curb output since last year.

U.S. production has reached a record, and weekly data last week showed overall U.S. output rising further, to more than 10.3 million barrels per day.

Wall Street dipped in the afternoon after seesawing through the morning.

The Dow Jones Industrial Average <.dji> fell 178.64 points, or 0.71 percent, to 24,999.97, the S&P 500 <.spx> lost 19.81 points, or 0.71 percent, to 2,763.21 and the Nasdaq Composite <.ixic> dropped 82.96 points, or 1.09 percent, to 7,505.36.

The slide was driven by big losses in the tech industry, with shares of Microsoft, Facebook and Alphabet down more than 1 percent, top losers on the S&P 500 and the Nasdaq.

Equity markets had opened higher after the U.S. Labor Department announced its Consumer Price Index rose 0.2 percent in February, in line with economists` expectations - data that suggested the Federal Reserve remains on track to raise interest rates at a gradual pace this year.

But "there`s a lot of noise coming out of Washington over all these changes that`s causing the markets to really not focus," said Ken Polcari, director of the NYSE floor division at O`Neil Securities in New York.

European stocks closed down across the board. The pan-European FTSEurofirst 300 index <.fteu3> lost 1.00 percent and MSCI`s gauge of stocks across the globe <.miwd00000pus> shed 0.45 percent.

Emerging market stocks rose 0.03 percent.

The dollar index <.dxy>, which measures the greenback against a basket of currencies, fell 0.2 percent, with the euro up 0.48 percent to $1.2391.

In U.S. Treasuries, benchmark 10-year notes last rose 9/32 in price to yield 2.8389 percent, from 2.87 percent late on Monday.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

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