Wall St Down on Weak Auto Sales, Doubts About Trump Agenda
Wall Street closed slightly lower on Monday as March auto sales disappointed and investors questioned whether the Trump administration would deliver on its pro-business economic stimulus.
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Stocks had risen to record highs on Trump's promises to cut taxes, ease regulations and spend heavily on infrastructure, and investors hoped that his policies would boost the economy.
General Motors was one of the biggest drags on the S&P 500 after automakers' sales figures for March came in below market expectations, an early signal America's long car sales boom may finally be losing steam.
"The disappointing auto sales are something people are keeping an eye on and that's meaningful news," said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
The major indexes pared losses. They had fallen sharply in morning trade after some U.S. states accused President Donald Trump's administration of illegally suspending energy efficiency standards.
The challenge came barely two weeks after Republican's had to pull healthcare reform bill due to a lack of support.
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AdvertisementAlso on Monday, Democrats amassed enough support to block a confirmation vote for Trump's Supreme Court nominee.
"If there's not one big reason (for the market decline), there's many little reasons. Right now I think it's a little reason day," said Brad McMillan, Chief Investment Officer for Commonwealth Financial in Waltham, Mass.
While investors still hope Trump can deliver on some of his agenda, they "are getting nervous and starting to discount some of the benefits they expected to see" said McMillan.
Adding to nerves was news of a explosion in a St Petersburg train tunnel that killed ten people on Monday in what Russian authorities called a probable terrorist attack.
Trump held out the possibility on Sunday of using trade as a lever to secure China's cooperation against North Korea, in comments that appeared designed to pressure Chinese President Xi Jinping ahead of their first meeting this week.
The Dow Jones Industrial Average fell 11.38 points, or 0.06 percent, to 20,651.84, the S&P 500 lost 3.8 points, or 0.16 percent, to 2,358.92 and the Nasdaq Composite dropped 17.06 points, or 0.29 percent, to 5,894.68.
Eight out of 11 major S&P 500 sectors were lower, led by the consumer discretionary index 0.5-percent. The top three drags on that sector were auto stocks.
GM finished down 3.4 percent while O'Reilly Automotive Inc, a car parts retailer, fell 4 percent. Fiat Chrysler sank 4.8 percent and Ford fell 1.7 percent.
Two indexes that gained were telecommunications and real estate - defensive sectors whose predictable slow growth are popular in times of uncertainty.
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