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Wall Street moved lower, Trump axes trade deal

By Margreet Dietz

The Dow Jones declined 0.3 per cent, while Nasdaq Index fell 0.2 per cent. Photo / AP
The Dow Jones declined 0.3 per cent, while Nasdaq Index fell 0.2 per cent. Photo / AP

Stocks fell on both sides of the Atlantic as President Donald Trump formally ordered the US to withdraw from the Trans-Pacific Partnership trade deal, bolstering concern about the impact on corporate profits and economic growth.

Trump also prepared to sign executive orders to renegotiate the North American Free Trade Agreement, Bloomberg reported, citing an official familiar with the plans.

"After a period of investor optimism around Trump comes a time of investor concern connected to his protectionism policy," Andrea Tueni, a trader at Saxo Bank, told Bloomberg. "This puts investors in a wait-and-see mode, they might be expecting further declines."

Wall Street moved lower. In 1.10pm trading in New York, the Dow Jones Industrial Average declined 0.3 per cent, while the Nasdaq Composite Index fell 0.2 per cent. In 12.54pm trading, the Standard & Poor's 500 Index gave up 0.5 per cent.

"The markets are less enthusiastic about protectionism than they are about pro-growth policies such as cutting taxes and decreasing regulation," Art Hogan, chief market strategist at Wunderlich Equity Capital Markets, told Reuters.

Slides in shares of General Electric and those of Boeing, recently 2.8 per cent and 1.3 per cent weaker respectively, led the Dow lower.

Bucking the trend were shares of Home Depot and those of Coca-Cola, up 1.7 per cent and 0.3 per cent respectively.

The greenback also weakened. US Treasuries gained, pushing yields on the 10-year note eight basis points lower to 2.39 per cent.

Shares of McDonald's fell after the fast-food chain posted a drop in US same-store sales for the fourth quarter, bolstering concern about its efforts to draw back customers seeking healthier options.

The markets are less enthusiastic about protectionism than they are about pro-growth policies such as cutting taxes and decreasing regulation.

The slide in US sales reflected "reflecting the challenging comparison against the prior year launch of the very successful All-Day Breakfast," McDonald's said. "Entering 2017, McDonald's US will continue to focus on growing guest traffic."

The stock traded 1.1 per cent weaker at US$120.87 in noon trading in New York after sliding as low as US$119.82 earlier in the session.

"These changes were supposed to drive a steady and sustainable uplift in [consumer] spending rather than a one-off spike in sales, but it is increasingly clear that this strategy is not delivering," Neil Saunders, head of retail analyst firm Consuming, told Reuters.

Even so, worldwide same-store sales increased a better-than-expected 2.7 per cent. The company posted a fourth-quarter profit of US$1.44 a share in the quarter, compared with an estimate of US$1.41.

In Europe, the Stoxx 600 Index finished the day with a 0.4 per cent drop from the previous close. France's CAC 40 Index fell 0.6 per cent, while the UK's FTSE 100 Index and Germany's DAX Index each slid 0.7 per cent.

- BusinessDesk

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