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Wall Street slightly lower as UK vote, Comey testimony loom

Posted by: Admin | Posted on: June 6th, 2017 | 0 Comments

U.S. stocks were slightly lower in early afternoon trading on Tuesday as investors shunned riskier assets ahead of what is expected to be a busy Thursday, when Britain goes to the polls and former FBI director James Comey testifies before Congress.

Comey, who was investigating a possible collusion between Donald Trump’s presidential campaign and Russia to sway the 2016 U.S. election, was fired in May.

His testimony could dampen already flagging momentum for Trump’s legislative agenda of rolling back healthcare reforms and overhauling the tax code.

Investors will also watch out for the European Central Bank’s meet, where policymakers are expected to take a more benign view of the economy, according to sources.

“We have a relatively light week in terms of economic data and investors are awaiting Thursday’s events,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

“The market’s reaction to Comey’s testimony would depend on if he says something new that nobody knows about, although, a lot of what he might be asked could be classified information.”

Safe havens were in favor, with gold XAU= touching its highest in about seven weeks and U.S. 10-year Treasury yields falling to their lowest levels since the days following the November election.

At 12:35 p.m. ET, the Dow Jones Industrial Average .DJI was down 20.17 points, or 0.1 percent, at 21,163.87 and the SP 500 .SPX was down 3.28 points, or 0.13 percent, at 2,432.82.

The Nasdaq Composite .IXIC was down 3.97 points, or 0.06 percent, at 6,291.72.

Six of the 11 major SP 500 sectors were lower, with the consumer discretionary .SPLRCD and financial indexes .SPSY leading the decliners.

Walt Disney’s (DIS.N) 1 percent fall weighed the most on the consumer discretionary sector.

Shares of Wal-Mart Stores (WMT.N) fell 1.8 percent to $78.85, dragging down the Dow and the SP. (AMZN.O) said it would offer Prime subscription service at a discount to its U.S. customers on government aid, taking aim at a key customer base of the discount retailer. Amazon was up 0.2 percent.

HD Supply Holdings (HDS.O) plunged 19 percent to a near seven-month low of $33.41 after the industrial distributor said it would sell a unit to private equity firm for $2.5 billion. The stock was the second-biggest drag on the Nasdaq.

Michaels Cos (MIK.O) fell as much as 9 percent to a three-year low of $18.05 after the crafts and home decor retailer slashed its forecast.

Declining issues outnumbered advancers on the NYSE by 1,633 to 1,182. On the Nasdaq, 1,788 issues fell and 989 advanced.

The SP 500 index showed 28 new 52-week highs and 11 new lows, while the Nasdaq recorded 82 new highs and 70 new lows.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D’Silva)

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