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Overnight Markets: Wall Street drops as Trump threatens government shutdown

Investors worried as the deadline to approve spending measures draws near and a fight looms over raising the debt ceiling.

 
Overnight Markets: Wall Street drops as Trump threatens government shutdown

Wall Street declined on Wednesday as investors grappled with comments from Donald Trump, US president, regarding the possibility of a government shutdown if Congress fails to fund a Mexico border wall.

The Dow Jones Industrial Average fell 89 points, or 0.4%, to 21,812, the S&P 500 lost eight points, or 0.34%, to 2,444 and the Nasdaq Composite dropped 19 points, or 0.3%, to 6,278.

Stocks managed to briefly pare losses after comments from US House Speaker Paul Ryan calling a government shutdown unnecessary. Yet that was not enough to calm nerves as the deadline to approve spending measures draws near and a fight looms over raising the cap on government borrowing.

Trump's comments also affected the bond and currency markets, with the dollar index slipping 0.4 to 93.14 and 10-Year US Treasury yields falling a touch below 2.17% on safety buying.

Investors looked towards a speech by Federal Reserve Chair Janet Yellen at a meeting of central bankers in Jackson Hole, Wyoming, on Friday, which will be scrutinised for clues on the US central bank's monetary policy.

Also weighing on sentiment was data showing sales of new US single-family homes unexpectedly declined in July to a seven-month low.

The consumer discretionary index ended down 0.8%, dragged lower by a 3.71% decline in Lowe's Companies (LOW.N) after disappointing results and forecast. Bigger rival Home Depot (HD.N) dropped 0.54%.

Shares of advertising firm Omnicom (OMC.N) dropped more than 6.94%, while Interpublic Group (IPG.N) fell 6.32% after WPP (WPP.L) cut its sales forecast after consumer goods giants curbed spending. WPP'S US-listed shares (WPPGY.O) sank 11.49%.

The worst performers of the session were Johnson & Johnson (NYSE:JNJ), which fell 1.41%. Walt Disney Company (NYSE:DIS) declined 1.24% and Cisco Systems Inc (NASDAQ:CSCO) was down 1.12%.

In Asia, most major indexes rose on Thursday in morning session despite Wall Street closing lower after a threat from President Donald Trump about a possible government shutdown.

Japan's Nikkei 225 was lower by 0.18% in early trade. Across the Korean strait, the Kospi advanced 0.58%. In Australia, the S&P/ASX 200 added 0.04%.

The Hang Seng Index rose 0.62% as markets in Hong Kong re-opened after being shut on Wednesday due to typhoon Hato. Markets on the mainland were mixed: the Shanghai Composite rose 0.23% while the Shenzhen Composite slid 0.11%.

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