Wall Street drops as Rosenstein jitters add to trade woes

By Shreyashi Sanyal (Reuters) - Industrials took the biggest knock on Wall Street on Monday as the latest U.S.-China tariffs kicked in, while adding to uncertainty were questions over whether Deputy Attorney General Rod Rosenstein, who oversees the Mueller investigation, had quit. With U.S

Reuters September 25, 2018 00:05:31 IST
Wall Street drops as Rosenstein jitters add to trade woes

Wall Street drops as Rosenstein jitters add to trade woes

By Shreyashi Sanyal

(Reuters) - Industrials took the biggest knock on Wall Street on Monday as the latest U.S.-China tariffs kicked in, while adding to uncertainty were questions over whether Deputy Attorney General Rod Rosenstein, who oversees the Mueller investigation, had quit.

With U.S. tariffs on some $200 billion worth of Chinese goods taking effect, along with Beijing's retaliatory duties, eight of the 11 major S&P sectors were lower. The gainers included the rebranded and expanded "communications services" index.

The industrial sector, which has borne the brunt of the protracted trade war, fell 1.44 percent, while material stocks slid 1.48 percent. Boeing, the biggest U.S. exporter to China, shed 1.3 percent.

The S&P 500 fell to session low after news website Axios reported Rosenstein, who oversees the special counsel investigation into Russia's role in the 2016 presidential election, had resigned.

A source told Reuters that Rosenstein had not resigned, while a White House spokeswoman said he would be meeting President Donald Trump on Thursday.

"Its a near-term cautious environment with Rosenstein contributing to the anxiety around trade," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

"The S&P was at a technically overbought position on Friday so it is not surprising to see it pulling back, investors are taking some risk of the table given that trade concerns have now resurfaced."

At 13:02 a.m. ET the Dow Jones Industrial Average was down 192.69 points, or 0.72 percent, at 26,550.81, the S&P 500 was down 15.03 points, or 0.51 percent, at 2,914.64 and the Nasdaq Composite was down 20.22 points, or 0.25 percent, at 7,966.74.

The CBOE Global Markets volatility index, known as Wall Street's "fear gauge", rose 1.12 points, its most in a week, as the shuffling of S&P 500 sectors took effect.

Helping curb losses were energy stocks, which rose 1.37 percent, as oil prices jumped after OPEC rebuffed calls by Trump to raise supply.

The technology sector cut earlier losses and was flat, lifted by Apple, whose products have been spared from new tariffs. Apple climbed 1 percent.

The communications services index, which now houses media stocks besides telecom companies, opened lower in its debut. But it eked out a 0.05 percent gain by afternoon as new member Netflix climbed 3 percent.

Fellow new members Twenty-First Century Fox and Walt Disney rose 1.3 percent and 1.5 percent, respectively, after losing an auction for Sky Plc to Comcast, which slid 7 percent.

Michael Kors's tumbled 8.50 percent. The fashion group has agreed to take control of Italy's Versace in a deal that could value the company at $2 billion, a source said.

Declining issues outnumbered advancers for a 2.23-to-1 ratio on the NYSE and a 1.87-to-1 ratio on the Nasdaq.

The S&P index recorded 15 new 52-week highs and three new lows, while the Nasdaq recorded 37 new highs and 38 new lows.

(Reporting by Shreyashi Sanyal in Bengaluru, additional reporting by Chuck Mikolajczak; Editing by Anil D'Silva)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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