Concerns about President Trump administration’s policy paralysis weighed on benchmarks on Friday. Terrorist attack in Barcelona also heightened geopolitical woes. The Dow suffered its second straight weekly loss on Friday, the worst since mid- September last year. The S&P 500 also posted its second weekly loss for the year, while the Nasdaq logged its fourth straight weekly loss, its longest losing weekly streak since May 2016.
The Dow Jones Industrial Average (DJIA) closed at 21,674.51, declining 0.4% or 76.22 points. The S&P 500 Index (INX) declined 0.2% or 4.46 points to close at 2,425.55. Seven of the S&P 500’s eleven primary sectors ended in the negative territory, with telecommunication and consumer-discretionary stocks leading the decliners. This has been the S&P 500’s worst performance since May.
Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,216.53, decreasing 5.39 points or 0.1%. Advancing issues outnumbered decliners on the NYSE by 1,464 to 1,288. On the Nasdaq, advancers outnumbered decliners by 1,480 to 1,257.
Steve Bannon Exits, Markets Incur Losses
U.S. equities closed off session lows after Steve Bannon left the administration. The departure of Bannon exposed a lot of disagreement in the Trump-era Republican Party. Such differences are hampering Trump administration’s efforts to kick-start the pro-economic policies. Needless to say, Trump’s promises on deregulation, trimming taxes and increasing infrastructure outlays, did, help the broader markets gain traction and climb to record highs this year.
Moreover, the growing backlash against the President following his remarks on the Charlottesville incident has dampened the investor sentiment as they become increasingly doubtful of his abilities to push through his tax and economic reform policies. This backlash has also resulted in Trump dissolving to CEO advisory firms. The members of the Republican Party are also increasingly alienating themselves from the President after his remarks on the events of the White Nationalist Rally in Charlottesville.
This growing divide within the Republican Party only makes it difficult for the President to push through his policies. This has the investors worried and brought about broad based losses for the market. The initial gains were pared after the market watchers lost their faith in the Trump Administration. Adding to the fears, the Barcelona attacks in which 14 people were killed and about 130 were injured, have also weighed on the markets.
For the week, the Dow declined 0.8%, the S&P 500 shed 0.7% and Nasdaq declined 0.6%. The losses for the week have been generally broad based. Rumors regarding Gary Cohn’s, the Chief Economic Advisor to Trump, resignation dampened investor sentiment. Further, Steve Bannon’s exit from the White House did bring about short lived gains for the market but they were soon pared as growing alienation within the Republican Party means that Trump would have a hard time pushing through his policies and investors lost their confidence in his administration. Moreover, the terror attack in Barcelona in which 14 people were killed and about 130 were injured also weighed on the markets.
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