US open: Dow heading to longest losing run in 6 years on Trump concerns
US stocks opened lower on Monday putting the Dow on track for its longest losing streak since 2011 amid growing doubts about President Donald Trump’s ability to push through his economic agenda.
On opening the Dow fell 0.8% to 20,430 points, marking its eighth consecutive day of losses.
At 1546 GMT, the Dow Jones Industrial Average was down 0.57% to 20,480.11, the S&P 500 fell 0.46% to 2,333.23 and the Nasdaq was 0.3% lower to 5,811.24.
Investors are growing concerned that Trump may not be able to deliver on his economic policies to spend $1trn on infrastructure, cut taxes and looser financial regulation, after Republican leaders withdrew their support for his healthcare bill on Friday, which was supposed to repeal former president Barack Obama’s Affordable Healthcare Act.
The dollar was also under pressure across the board after the failed passage of the bill.
The greenback was down 0.82% against the pound to 0.7952, 0.77% weaker versus the euro at 0.9190 and 0.88% lower against the yen at 110.36.
“The continued growing pains of the new administration as well as the inability to generate a consensus to deliver a new health care bill has taken the heat out of the recent rally, in the past few weeks and Friday’s capitulation appears to have lowered the temperature further, as markets start to catch a cold, Michael Hewson, chief market analyst at CMC Markets, said.
“Having overseen a strong rally in stock markets over the past few months the new US president is learning a hard lesson in the differences between campaign promises and the ability to deliver them in a difficult political environment.”
Hewson said that Trump is learning the hard way that there are big differences in promising the earth and then being able to deliver it.
“For all his optimism that he can park his health care reforms and come back to them later, while moving on to tax reform, and or infrastructure spending, there is rising scepticism amongst investors that he will fare much better on this score either,” he added.
With the absence of major data published on Monday, market participants will draw their attention to a speech by Chicago Fed President Charles Evans in Madrid and a speech by Dallas Fed President Rob Kaplan about economic conditions at Texas A&M University.
Meanwhile, oil prices were moving lower, with Brent Crude down 1.35% to $50.12 per barrel and West Texas Intermediate 1.71% lower at $47.16, after an unscheduled OPEC meeting over the weekend, where the cartel of major producers announced that they would stick to their plan to reduce production and said cuts could be extended up to six months.
On the corporate front, Apple was down 0.26% after a Chinese court overturned a ruling against the technology giant over iPhone patents.
Snapchat parent Snap rose 3.76% after RBC Capital Markets initiated the stock at ‘overweight’ with a target price of $31, while JP Morgan initiated coverage at ‘neutral’ with a price target of $24.
United Airlines fell 0.56% following news that the carrier stopped two girls wearing leggings from boarding a flight.