US stocks closed lower on Monday, failing to show much upside all session as President Donald Trump demonstrated that trade protectionism would be the heart of his policy and with tech stocks dominating the downside.
The S&P 500 finished the day 0.3% lower at 2,265, the Dow Jones Industrial Average declined 0.1% to 19,799. The Nasdaq Composite meanwhile was little changed at 5,552.
The market reaction came as Trump pulled the US out of the Trans Pacific Partnership, which has been a crucial initiative under former President Barack Obama’s branch to Asia. Over the weekend Trump signalled that he would seek to renegotiate the North American Free Trade Agreement. He has also threatened to punish American companies for moving production overseas.
Qualcomm (NASDAQ:QCOM) was the top decliner on the S&P 500, shedding 12.6% to $54.95 after a broker downgrade followed news on Friday that Apple Inc (NASDAQ:AAPL) filed a $1bn lawsuit against Qualcomm. The stock’s shares hit their lowest in more than a year.
The lawsuit – the first direct challenge by one of Qualcomm’s major customers – prompted Nomura to cut its ratings on the company to Neutral from Buy.
The S&P Midcap 400 ended down 0.2% at 1671 and led by Computer Sciences Corp (NYSE:CSC) down 6% at $58.73 after – the irony – the IBM Retirement Fund cut its position in shares of Computer Sciences by 6.3% during the third quarter, according to its most recent 13F filing with the Securities and Exchange Commission.
The S&P Smallcap 600 closed down 0.3% at 825 and led by First Pactrust Bancorp (NYSE:BANC) down 9.3% to $14.65.
Pre-Open
US stocks are set to open narrowly mixed on Monday, as markets adjust to the first day of the new administration now that the celebrations are fading and the terminology of US President Donald Trump’s speech.
Markets ended higher on Friday, after the inauguration of US President Donald Trump, but unchanged as the ceremony proceeded. The initial take was that Trump didn’t moderate his language in his inaugural address and if anything he’s being interpreted as hell-bent on retreating from America's global leadership role.
With that, the dollar was declining and it didn’t spell well for the bourse either.
But investors will have a clearer picture of what the new administration plans as the weeks roll. On Friday, Trump’s speech was heavy on slogans and thin on specifics.
The S&P 500 market bellwether was expected to open down 0.2%, the tech-heavy Nasdaq Composite down 0.2% while the Dow Jones Industrial Average may muster a 0.04% gain at the opening on Monday.
Investors are putting their money into safe-haven sovereign bonds, causing yields to fall across the board.
Markets had been rallying since Trump's election in November. All the main U.S. indexes hit all-time highs earlier this year.
Halliburton (NYSE:HAL), one of the biggest US oilfield servicing companies, said on Monday that the international energy market will not reach an “inflection” point until the second half of this year as it unveiled a 2016 net loss of almost $6bn. Its shares were 1.2% lower at $55.80 pre-market.
McDonald's Corporation (NYSE:MCD) on Monday revealed stronger-than-expected fourth-quarter sales in the latest sign that the turnaround for the world’s biggest burger chain is still on track.
The Golden Arches said that its global like-for-like sales rose by 2.7% in the final three months of 2016, beating Wall Street estimates for a rise of 1.4%.
However, in its biggest market, the US, sales fell back 1.3% but that was less than estimates of 1.4%. Shares were down 0.8% at $121.30 pre-market.
On the flip side, Sprint Corp (NYSE:S) shares were higher. Sprint has acquired a 33% stake in Tidal, the music streaming service owned by rapper Jay Z, as the US telecoms group looks to challenge Spotify and Apple Music in the fast-growing sector. Sprint shares were up 1% at $9.02.