Wall Street falls on concerns over Trump's pro-growth policy

Updated: Thu, Aug 17, 2017
08:54 pm
Reuters
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U.S stocks were lower in choppy late morning trading on Thursday as investors worried about President Donald Trump`s ability to pursue his pro-growth policies.

Trump disbanded two business councils on Wednesday after several chief executives quit in protest over his remarks on white nationalists.

Stocks had hit session lows before paring losses after Axios reporter Jonathan Swan tweeted, citing a source with direct knowledge, that rumors around the resignation of Gary Cohn, director of National Economic Council, is "100 (percent) false."

A White House official said Cohn "intends to remain in his position as NEC director ... nothing`s changed."

"The concern would be if Gary Cohn would decide that if he needs to take a safe step that a lot of CEOs did, it will be very difficult to move forward with pro-growth tax reforms," said Art Hogan, chief market strategist at Wunderlich Securities.

At 11:05 a.m. ET (1505 GMT), the Dow Jones Industrial Average was down 80.97 points, or 0.37 percent, at 21,943.9 and the S&P 500 was down 10.45 points, or 0.42 percent, at 2,457.66. The Nasdaq Composite was down 45.32 points, or 0.71 percent, at 6,299.79.

Investors have also been assessing minutes from the Federal Reserve`s July meeting that showed growing concerns over weak inflation, muddying the path of interest rate hikes.

Weak inflation has spurred concerns that the Fed may have to cool its monetary tightening pace even though the economy is growing moderately and the unemployment rate is at a 16-year low.

The central bank is also considering reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities.

"If they don`t start selling their asset portfolio in September, which is what they have indicated, that will be a negative signal to the markets," said Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, Massachusetts.

"The Fed is still fairly comfortable with the economics, but they`re getting more concerned about the politics."

Nine of the 11 major S&P sectors were lower, with technology index`s 0.93 percent fall topping the list.

Cisco fell 3.5 percent after reporting a revenue miss in its closely-watched security business.

Wal-Mart was down 1.7 percent after the retailer reported a drop in margins due to continued price cuts and investments in its e-commerce operations.

Declining issues outnumbered advancers on the NYSE by 1,646 to 1,060. On the Nasdaq, 1,641 issues fell and 1,034 advanced.

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

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