Wall Street slips on wiretap accusation, geopolitical worries

EghtesadOnline: U.S. 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.

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07 March 2017

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, according to Reuters.

The CBOE Volatility index .VIX, 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 behavior 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 9:40 a.m. ET (1440 GMT), the Dow Jones Industrial Average .DJI was down 71.65 points, or 0.34 percent, at 20,934.06, the S&P 500 .SPX was down 11.79 points, or 0.49 percent, at 2,371.33 and the Nasdaq Composite .IXIC was down 29.37 points, or 0.50 percent, at 5,841.39.

All of the 11 major S&P sectors were lower. Financials .SPSY, which gained the most in the post-election rally, took the biggest hit.

Among stocks, Netflix (NFLX.O) rose 2.3 percent to $142.4 after UBS upgraded the stock to "buy" from "neutral".

Albemarle (ALB.N) was the biggest percentage loser on the S&P, with a 5 percent decline after Citigroup downgraded the lithium producer's stock to "neutral" from "buy".

Tyson Foods (TSN.N) was down 3.2 percent at $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.