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U.S. stocks mixed: Dow continues rally, tech hit by Trump policy concern

Published 11/10/2016, 11:59 AM
© Reuters.  Wall Street trades mixed with Nasdaq slumping on concern over impact of future Trump policy
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Investing.com – Trade was mixed on Wall Street Thursday as investors began to weigh negative implications for tech firms on speculation over President-elect Donald Trump’s future policies.

At 11:57AM ET (16:57GMT), the Dow Jones gained 139 points, or 0.74%, the S&P 500 slipped 3 points, or 0.16% while the tech-heavy Nasdaq Composite traded down 71 points, or 1.35%.

Pfizer (NYSE:PFE) led the Dow Jones higher with gains of more than 4% as pharmaceuticals continued to breathe a sigh of relief over Hillary Clinton’s defeat. The Democratic candidate had promised to work on legislation to end price-gauging.

JP Morgan (NYSE:JPM) also gained near 3% on the blue-chip index as speculation pointed to the fact that Trump might undo the Dodd-Frank regulation while implementing inflationary policies that would lead to an increase in interest rates, helping financial institution’s bottom line.

On the downside, tech stocks tumbled as investors began to weigh the implications for these firms from Trump’s critiques of hiring high-skilled workers from overseas or manufacturing outside the U.S.

The so-called FANG stocks -short for Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Google’s parent Alphabet Inc (NASDAQ:GOOGL)- were all tumbling by around 4%.

In Amazon’s case, investors appeared to worry about the impact due to founder Jeff Bezos, who also owns the Washington Post, a newspaper that criticized Trump throughout the campaign.

Trump had accused Bezos of using the Washington Post to save Amazon in terms of taxes and antitrust issues.

In earnings news, shares in Kohl’s (NYSE:KSS) jumped nearly 14% as the department store chain beat earnings estimates and provided a strong guidance.

Rival Macy’s (NYSE:M) soared nearly 9% despite missing consensus as the firm pointed to improving retail trends and upped its sales outlook.

Nordstrom (NYSE:JWN) and Disney (NYSE:DIS) were among companies on tap to release earnings after the market close.

Additionally, in a huge market move, TubeMogul Inc (NASDAQ:TUBE) skyrocketed 82% after Adobe (NASDAQ:ADBE) agreed to acquire the advertising software firm for $540 million.

Meanwhile, Federal Reserve (Fed) officials began to comment on Trump’s victory.

San Francisco Fed president John Williams said that the election outcome hadn’t changed his approach to monetary policy, insisting that “it’s really driven by the data.”

Williams reiterated that he supported the argument for a gradual rate of increases as the Fed seeks to remove accommodative monetary policy over the next few years.

St. Louis Fed chief James Bullard, for his part, noted that the outcome could be positive for the implementation of fiscal policy as the Republican victory could end the government gridlock.

Bullard also repeated his call for only one more hike in the next two to three years, though he noted that an increase at the next meeting would be reasonable.

Markets are currently pricing in the odds of a rate hike at the December meeting at 76.3%, according to Investing.com's Fed Rate Monitor Tool.

On the economic front, weekly jobless claims gave another sign of strength in the labor market as they rose less than expected, strengthening the case that the U.S. economy was near full employment.

The U.S. Treasury Department will release the government budget balance for October later on Thursday.

In oil markets, crude was under pressure as the International Energy Agency (IEA) warned that the market risks running another surplus in 2017 without an output cut from OPEC.

In its monthly oil market report, the IEA said global supply rose by 800,000 barrels per day in October to 97.8 million bpd, led by record OPEC output and rising production from non-OPEC members such as Russia, Brazil, Canada and Kazakhstan.

OPEC reached an agreement to cap output to a range of 32.5 million to 33.0 million barrels per day in talks held in Algeria in late September. However, the 14-member oil group said it won’t finalize details on individual output quotas until its next official meeting in Vienna on November 30.

“If no agreement is reached and some individual members continue to expand their production then the market will remain in surplus throughout the year, with little prospect of oil prices rising significantly higher,” the IEA warned in the report.

U.S. crude futures lost 1.41% to $44.63 by 11:58AM ET (16:58GMT), while Brent oil traded down 1.27% to $45.77.

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