US equities pared losses on Monday but didn’t disguise the steepest fall of 2017 as the Trump rally trade that sent Wall Street to new highs since November began to fracture.
The market bellwether S&P 500 closed the day down by 0.6% at 2,280. Earlier it had been as much as 1.2% lower on the day.
The Dow Jones Industrial Average ended down 0.6% at 19.971 and spent its first session below the 20,000 mark it had struck last week.
Energy shares fell 1.8% and airlines took a battering from US President Donald Trump’s temporary travel ban on passengers from seven Muslim-majority nations.
The top faller on the S&P 500 was oil group Transocean Inc (NYSE:RIG) down 7.1% at $13.84. Oil prices fell too, the US benchmark West Texas Intermediate down 1% at $52.67.
The S&P Midcap 400, which also pared losses, fell by 0.8% to 1682 and was led by furniture retailer Tempur-Pedic International Inc (NYSE:TPX) down 28% at $45.49 after it announced it ended all contracts with Mattress Firm, one of the company’s key customers.
The S&P Smallcap 600 finished down 1.3% at 827 – without paring its session losses. Opus Bank (NASDAQ:OPB) was the biggest faller of 25.5% to $20.30.
Opus Bank was downgraded by broker JP Morgan to ” Neutral” from “Overweight” in the wake of the company reported a lurch into losses in the fourth quarter despite higher revenues.
Midsession
US stocks endured extended losses on Monday as the fallout from President Donald Trump’s decision to order a travel ban on passengers from seven Muslim nations gathered speed.
The market bellwether S&P 500 was down 1% at 2272 with airlines among those taking the brunt of the negative bourse sentiment.
American Airlines Group Inc (NASDAQ:AAL) taxied the airlines on the downside, with a 5.2% decline to $44.50, followed by United Continental Holdings Inc (NYSE:UAL) down 4.1% to $71.38 and Delta Air Lines, Inc. (NYSE:DAL) down 3.9% to $47.78.
In something of a sideshow Delta Airlines unexpectedly found itself dragged into the fallout of Trump’s travel ban on Monday after the President blamed the US carrier for “big problems” seen in US airports over the weekend.
Energy stocks also took a knock, with the US benchmark oil price, the West Texas Intermediate down 0.8% at $52.77.
That translated into falls for Range Resources (NYSE:RRC) down 6.9% to $33.26. That’s in spite of positive remarks on the stock by Zacks. Range recently reported 2016 proved reserves figures.
The new reserve of 12,072bn cubic feet equivalent (Bcfe) marks an increase of 22% from the 2015 reserve of 9,892 Bcfe. Excluding acquisitions and divestitures, the 2016 reserve displays 11% improvement. Proved developed reserves jumped 14% after keeping aside the impact of acquisitions and divestitures. Range Resources added that it has replaced 292% of production.
Chesapeake Energy Corp (NYSE:CHK) shares fell 6.7% to $6.46, Marathon Oil Corp (NYSE:MRO) down 5.9% to $16.39, Murphy Oil Corp (NYSE:MUR) down 5.4% to $28.36, Newfield Exploration Company (NYSE:NFX) down 4.2% to $40.03, Concho Resources Inc (NYSE:CXO) down 4.2% to $137.96, Southwestern Energy Company (NYSE:SWN) down 4.2% to $9.02 and ConocoPhillips (NYSE:COP) down 3.8% to $47.57.
The S&P Midcap 400 was down 1.1% at 1679 and led by Tempur-Pedic International Inc () down 28.6% to $45.15.
Oil companies again made downside appearances with Denbury Resources (NYSE:DNR) down 8.4% to $3.37, Noble Corp (NYSE:NE) down 6.8% at $6.71 and Ensco Plc (NYSE:ESV) down 7.6% at $10.51.
The sharpest falls – but at the margin – were among small-cap stocks. The S&P 600 was down 1.2% at 828 and led by, among others, Contango Oil & Gas Company (NYSE:MCF) down 9.3% at $8.25, and Northern Oil and Gas (NYSE:NOG) down 7.7% at $3.37.
Pre-Open
US stocks are expected to start the week mostly lower in sympathy with global markets after a weekend of confusion and protests over an executive order issued by President Donald Trump that bans travel from seven Muslim-majority nations.
The dollar weakened and US stock futures were trading lower ahead of the open. With markets in China shut for most of the week because of the Chinese New Year, overnight falls in Asia after Trump’s travel ban order were more exaggerated.
Meanwhile, Lloyd Blankfein, Goldman Sachs (NYSE:GS) chairman and chief executive, criticised President Donald Trump’s executive order on immigration from Muslim-majority countries in a voicemail to staff on Sunday, the Financial Times reported. Goldman shares were down 0.6% at $235.64 pre-market.
Only the tech-heavy Nasdaq Composite is set for light gains. The market bellwether S&P 500 and Dow Jones Industrial Average are indicated 0.6% lower.
The controversial travel ban order has been publicly criticised by top corporate leaders – including from the tech sector.
Starbucks Corp (NASDAQ:SBUX) said it would hire 10,000 refugees over five years in response to the ban. General Electric (GE) and JPMorgan Chase (JPM) have also expressed concerns about how the order will affect their employees. Starbucks shares were down 0.8% at $55.55 pre-market.
Airlines were among the biggest fallers ahead of the bell. American Airlines (NASDAQ:AAL) shares were down 2.1% at $45.97.
In something of a sideshow Delta Airlines (NYSE:DAL) unexpectedly found itself dragged into the fallout of Trump’s travel ban on Monday after the President blamed the US carrier for “big problems” seen in US airports over the weekend. Delta shares were down 1.7% at $48.85.
There were also jitters for Apple (NASDAQ:AAPL) whose shares took a hit pre-market trading ahead its results report on Tuesday. Shares were down 0.6% at $121.02.
Among stocks set to do well on Monday were German carmaker Volkswagen (OTC:VLKAY) which toppled Toyota (NYSE:TM) as the world's top-selling automaker, despite the massive fallout from its 2015 emission rigging scandal.
Toyota said Monday it sold 10.2 million vehicles worldwide in 2016, falling short of the 10.3 million vehicles Volkswagen delivered.
In data, a measure of US inflation climbed in December to the highest level since September 2014, highlighting the resurgent price pressures in the world’s biggest economy.
The personal consumption expenditures price index climbed to a year-on-year pace of 1.6% in December, from 1.4% in the previous month. That came in slightly short of the 1.7% that Wall Street had anticipated.
US price growth has been boosted by a jump in energy prices amid the rally in crude oil, as well as pressures elsewhere from a tightening labour market.
The US oil benchmark West Texas Intermediate was flat at $53.11.