Wall Street spooked by Trump sacking Tillerson, tech stocks slide


Updated

March 14, 2018 08:20:02

Wall Street ended its day sharply lower, weighed down by US President Donald Trump’s decision to sack his Secretary of State, Rex Tillerson.

Markets at 7:15am (AEDT):

  • ASX SPI 200 futures -0.6pc, ASX 200 (Tuesday’s close) -0.4pc at 5,975
  • AUD: 78.54 US cents, 56.23 British pence, 63.39 Euro cents, 83.7 Japanese yen, $NZ1.07
  • US: Dow Jones -0.7pc at 25,007, S&P 500 -0.6pc at 2,765, Nasdaq -1pc at 7,511
  • Europe: FTSE -1.1pc at 7,139, DAX -1.6pc at 12,221, Euro Stoxx 50 -0.9pc at 3,397
  • Commodities: Brent crude -0.6pc at $US64.54/barrel, spot gold +0.2pc at $US1,325.56/ounce, iron ore -0.2pc at $US69.78/tonne

Tillerson’s sacking weighs on markets

Mr Tillerson did not see eye-to-eye with the President on foreign policy regarding North Korea, Iran, Russia and other matters.

Critics said the move would sow more instability in the volatile Trump administration, and it marked the departure of another moderate who sought to emphasise the United States’ strong ties to its allies amid Mr Trump’s criticism.

His exit comes a week after the resignation of the White House’s chief economic adviser, Gary Cohn, who disagreed with Mr Trump about imposing tariffs on metal imports.

The President also appointed CIA director Mike Pompeo as his new secretary of state.

“Pompeo is known to be a real hawk on trade and foreign policy,” said Jim Awad, senior managing director at Hartland & Co in New York.

“There’s nobody to be a check and balance on Trump.

“It’s been unsettling to the market within the context of what we see now in the economy, which is a favourable backdrop.”

The Nasdaq index fell by 1 per cent, followed by the S&P 500, which lost 0.6 per cent.

As for the Dow Jones index, it tumbled by 0.7 per cent to 25,007.

European markets also sank in response to Mr Tillerson losing his job, which signalled a hard-line shift in foreign policy.

London’s FTSE fell by 1.1 per cent, while Frankfurt’s DAX index dropped by an even steeper 1.6 per cent.

Scuttled takeover sinks tech sector

Mr Trump’s decision to prevent the world’s most expensive takeover of a technology company on national security grounds also weighed on Wall Street, particularly the technology sector.

The US President blocked the $150 billion takeover of Qualcomm (the leading 5G mobile developer in the US) by Singapore-based tech giant Broadcomm.

Investors dumped their Qualcomm shares, causing its share price to plummet by 5 per cent.

This made Qualcomm the worst performing stock on the S&P 500 overnight.

Technology was the worst-performing S&P sector by far (down 1.4 per cent), also dragged down by profit-taking.

Tech shares have had a strong run recently, so investors cashed in — sinking the share price of Microsoft (-2.4pc), Facebook (-1.6pc) and Google (-2.2pc).

Most sectors finished in negative territory, with financials (-0.9pc) and energy (-0.7pc) being the next weakest performers.

Australian market today

The Australian share market is expected to open lower today, with ASX futures down 0.6 per cent.

In local economic news, Westpac will release its latest monthly consumer confidence report today.

The Australian dollar had fallen by 0.2 per cent to 78.55 US cents at 7:00am AEDT.

It also fell sharply against the British pound (-0.7pc), euro (-0.7pc) and New Zealand dollar (-0.6pc).

Topics:

business-economics-and-finance,

stockmarket,

markets,

currency,

economic-trends,

company-news,

united-states,

australia

First posted

March 14, 2018 07:33:12



Source link

Advertisements
About NBN Editorial Team 60674 Articles
NBN's team of Field Producers, Editorial Staff & Contributors create & produce original content for distribution. NBN is located in Beautiful Tampa Bay with Mobile Units Serving Miami, Orlando and Fort Myers.