New York (AFP) – Worries about US policy on Iran and trade tilted Wall Street into the red Monday ahead of major earnings, trade and monetary policy announcements.
US stocks started the day on a high note following strong McDonald’s earnings and a stream of merger announcements, but weakened midday around the time Israeli Prime Minister Benjamin Netanyahu accused Iran of lying about its nuclear intentions.
Netanyahu’s Iran accusation helped boost oil prices, but also contributed to the drop in US stocks, analysts said.
Most other leading bourses had a positive day with Asian markets rising on progress in addressing North Korea’s nuclear program and European markets advancing as the pound and euro retreated.
“The concern over geopolitics sort of takes precedence over the fundamentals,” said Art Hogan, chief market strategist at Wunderlich Securities.
Besides Iran, investors are uneasy ahead of a midnight deadline for the Trump administration to enact tariffs on steel and aluminum imports from the European Union, Canada, Mexico and four other counties that currently benefit from tariff exemptions.
This week’s calendar also includes the April US jobs report and a two-day Federal Reserve meeting that is not expected to feature a new interest rate increases, but could signal a more aggressive path ahead.
A key US inflation benchmark most closely watched by the Fed hit the two percent annual target for the first time in just over a year, the Commerce Department reported.
– Mixed reception to deals –
A stream of major corporate deals unveiled ahead of Monday’s session drew mixed reviews.
Britain’s second and third biggest supermarket chains Sainsbury’s and Walmart-owned Asda agreed to merge, the pair said Monday, hoping to create a £13-billion ($18-billion, 15-billion-euro) retail king and leapfrog UK number one Tesco.
Sainsbury’s stock shot up 14.5 percent to 309.00 pence, while Tesco slid 0.9 percent to 235.90 pence. Asda is not listed.
Walmart shares rose 1.3 percent in New York to $88.46.
Britain’s Competition and Markets Authority regulator warned the merger will “likely” be subject to a review — despite terms of the deal saying both brands would be retained and no stores shut.
Analysts said the new group could be forced to sell off some existing stores, most likely in areas where they would be left with no rival competition.
Shares of Sprint nosedived 13.7 percent and T Mobile fell 6.2 percent on doubts that US regulators will permit a merger between the number three and four US telecom companies. Other telecom companies also slid, including Dow member Verizon, which shed 4.3 percent.
Andeavor surged 13.0 percent after it agreed to be acquired by fellow refiner Marathon Petroleum for $23.3 billion. Marathon dropped 8.0 percent.
– Key figures around 2100 GMT –
New York – Dow: DOWN 0.6 percent at 24,163.15 (close)
New York – S&P 500: DOWN 0.8 percent at 2,648.05 (close)
New York – Nasdaq: DOWN 0.8 percent at 7,066.27 (close)
London – FTSE 100: UP 0.1 percent at 7,509.30 (close)
Frankfurt – DAX 30: UP 0.3 percent at 12,612.11 (close)
Paris – CAC 40: UP 0.7 percent at 5,520.50 (close)
EURO STOXX 50: UP 0.4 percent at 3,534.19 (close)
Hong Kong – Hang Seng: UP 1.7 percent at 30,808.45 (close)
Seoul – Kospi: UP 0.9 percent at 2,515.38 (close)
Tokyo – Nikkei 225: Closed for a public holiday
Shanghai – Composite: Closed for a public holiday
Euro/dollar: DOWN at $1.2081 from $1.2130 at 2100 GMT on Friday
Pound/dollar: DOWN at $1.3766 from $1.3782
Dollar/yen: UP at 109.30 yen from 109.05
Oil – Brent North Sea: UP 53 cents at $75.17 per barrel
Oil – West Texas Intermediate:UP 47 cents at $68.57 per barrel