A trader works at the New York Stock Exchange. Photo / AP
A trader works at the New York Stock Exchange. Photo / AP
Wall Street fell as investors reassessed their bets on increased government spending, lower taxes and looser regulation as US President-elect Donald Trump stopped short of offering further details.
On Wednesday, in his first press conference since his election victory, Trump failed to provide fresh insights into his stimulus plans.
"The thing people were looking for was further context about fiscal spending plans and there wasn't anything," Simon Derrick, chief currency strategist at Bank of New York Mellon in London, who recommends buying volatility, told Bloomberg.
"Last year the market didn't always get it right. It could be that it has misread what will happen this year as well."
In 1.20pm trading in New York, the Dow Jones Industrial Average dropped 0.5 per cent, while the Nasdaq Composite Index shed 0.6 per cent. In 1.05pm trading, the Standard & Poor's 500 Index retreated 0.5 per cent.
Meanwhile, US Treasuries rose, pushing yields on the 10-year note four basis points lower to 2.33 per cent.
"Some wind has been taken out of the reflation trade, at least for the short term," Jeff Zipper, managing director at the Private Client Reserve, US Bank in Florida, told Reuters.
"There is a high probability of more volatility if his agenda does not go through or may take longer than he expects."
The Dow slid, led by declines in shares of Walt Disney and those of Microsoft, down 1.6 per cent and 1.4 per cent respectively.
Meanwhile, a Labour Department report showed initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 247,000 for the week ended January 7.
"Jobless claims remain in a very constructive range and are still evidence of an environment in which turnover is low and employers are generally content to maintain and expand their payrolls," Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan, told Reuters.
The thing people were looking for was further context about fiscal spending plans and there wasn't anything.
A separate Labour Department report showed import prices rose less than expected last month, climbing 0.4 per cent in December, bolstered by higher oil prices.
In Europe, the Stoxx 600 Index ended the day with a 0.7 per cent decline from the previous close, as shares of car makers and health care companies dropped. France's CAC 40 Index fell 0.5 per cent, while Germany's DAX Index shed 1.1 per cent.
The UK's FTSE 100 Index eked out a 0.03 per cent gain to close at a record high for the 11th straight session.
Bucking the trend, shares of Suedzucker climbed after Europe's largest sugar refiner lifted its full-year operating profit estimate. The stock closed 3.3 per cent higher in Frankfurt.
"The higher result was mainly attributable to the sugar segment, but the fruit and special products segments also contributed," the company said in a statement.
