US stock market sinks 500 points as Brexit mess fuels angst

The last few months have weighed heavily on the market. Photo/Bloomberg.

US markets deepened their losses Monday as Britain's political crisis around Brexit clouded investors' outlook. British Prime Minister Theresa May put off a key parliamentary vote on her country's exit from the European Union.

Investors are also on edge about developments in the US-China trade dispute.

The Dow Jones industrial average dropped more than 500 points - or 2 per cent - in morning trading, dragged lower by banks and Apple. The iPhone maker was ordered by a Chinese court to stop selling some of its late-model phones in the country after a ruling that it had infringed on patents held by Qualcomm.

Kenny Polcari of ButcherJoseph Asset Management said the latest brouhaha over Brexit piles on to the worries that have beset markets in recent weeks.

"The market has been focusing on all the negative stories," Polcari said. "As long as the tone is negative, any negative story is going to cause a market overreaction. Brexit is certainly one of them. All of a sudden, Brexit has hit a real speed bump. That's what's going on."

JPMorgan Chase was down nearly 3 per cent Monday, followed by American Express down 2.3 per cent and Goldman Sachs down 2 per cent.

The Standard & Poor's 500-stock index fell 1.8 per cent and Nasdaq Composite down 1.2 per cent.

The declines follow a miserable week that saw all three major indexes drop by more than 4.5 per cent. Both the Dow and S&P 500 are in negative territory for 2018. The Nasdaq is barely treading positive for the year, up about one half a per cent in mid-day Monday trades.

British Prime Minister Theresa May on Monday postponed a crucial parliamentary vote on her government's Brexit legislation. Her announcement comes just months before the British are scheduled to leave the European Union and has thrown her government into disarray.

- Washington Post