Published On: Tue, May 8th, 2018

Wall Street down after Trump quits Iran deal

(Reuters) – Wall Street remained down on Tuesday while energy stocks cut earlier losses after U.S. President Donald Trump said the United States would quit the Iran nuclear deal, confirming what many investors had expected.

People walk past the New York Stock Exchange June 15, 2012. REUTERS/Eric Thayer

In a televised speech, Trump said the United States would withdraw from a 2015 international agreement designed to deny Tehran the ability to build nuclear weapons, and also reinstate sanctions on Iran.

The S&P energy sector .SPNY trimmed earlier losses to trade down 0.1 percent as oil prices CLc1LCOc1 also reduced earlier declines.

The decision to leave the agreement with Iran is likely to raise the risk of conflict in the Middle East, upset America’s European allies and disrupt global oil supplies. Trump said he is willing to negotiate a new deal with Iran.

“It does create more global uncertainty but people shouldn’t be surprised. We’re selling off but we’re not down that much,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

Major stock indexes recovered but then fell again to levels prior to Trump’s speech.

“He’s not closed the door and shunned them. He wants a new deal. The door is open to try again, which is probably less harsh than what he could have said,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.

“There’s going to be speculation around any un-measurable risk and political risk is un-measurable. This afternoon will be the real effect now he’s made the statement,” Battle said.

At 2:52 p.m. ET, the Dow Jones Industrial Average .DJI was down 0.36 percent at 24,270.35 points, while the S&P 500 .SPX had lost 0.35 percent to 2,663.23.

The Nasdaq Composite .IXIC dropped 0.29 percent to 7,244.31.

S&P industrials .SPLRCI rose 0.26 percent, leading the market, followed by financials .SPSY, up 0.16 percent. Other major sectors had losses.

Comcast (CMCSA.O) fell 5.07 percent after Reuters reported the cable operator is preparing to make an all-cash offer for media assets that Twenty-First Century Fox (FOXA.O) has agreed to sell to Disney (DIS.N) for $ 52 billion.

Disney, which is due to report its results after markets close, was down 1.47 percent. Fox’s shares dipped 0.4 percent.

Declining issues outnumbered advancing ones on the NYSE by a 1.35-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored decliners.

The S&P 500 posted 17 new 52-week highs and 12 new lows; the Nasdaq Composite recorded 108 new highs and 38 new lows.

Reporting by Noel Randewich, Additional reporting by Sinead Carew in New York, and Medha Singh and Sruthi Shankar in Bengaluru; Editing by Nick Zieminski

Reuters: Business News