Wall Street slips after Tillerson exit

Wall Street slips after Tillerson exit

Reuters  | Mar 13, 2018 03:14PM ET

Wall Street slips after Tillerson exit

By April Joyner

NEW YORK (Reuters) - Wall Street's major indexes fell on Tuesday as uncertainty in Washington stemming from the dismissal of Secretary of State Rex Tillerson dragged down stocks across sectors.

U.S. President Donald Trump fired Tillerson after a series of public rifts over issues including North Korea and Russia. Steve Goldstein, a State Department undersecretary of state for public affairs, was also fired, soon after releasing a statement that Tillerson did not know why he was being pushed out.

Trump has tapped CIA Director Mike Pompeo, seen as loyal to the president, to replace Tillerson.

The influx of political news overshadowed earlier positive economic news earlier. The markets had opened higher after data showed U.S. consumer price growth slowed in February, an indication that an anticipated pickup in inflation probably will be only gradual.

"Pompeo is known to be a real hawk on trade and foreign policy," said Jim Awad, senior managing director at Hartland & Co in New York. "There's nobody to be a check and balance on Trump. It's been unsettling to the market within the context of what we see now in the economy, which is a favorable backdrop."

The Dow Jones Industrial Average (DJI) fell 104.61 points, or 0.42 percent, to 25,074, the S&P 500 (SPX) lost 13.7 points, or 0.49 percent, to 2,769.32 and the Nasdaq Composite (IXIC) dropped 62.19 points, or 0.82 percent, to 7,526.13.

Tech (SPLRCT) and financial (SPSY) stocks were the biggest laggards among the S&P 500's 11 major sectors.

Shares of Microsoft Corp (O:MSFT), Facebook Inc (O:FB) and Alphabet Inc (O:GOOGL) fell between 1.3 percent and 2.3 percent.

"Technology rallied hard yesterday and last week, and there is profit-taking, but it's just a short-term pressure," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

Financial stocks were weighed as U.S. Treasury yields fell in response to the CPI data and Tillerson's exit.

Among individual stocks, General Electric Co (N:GE) fell 4.3 percent after J.P. Morgan cut its price target on the stock to $11 from $14, saying the industrial conglomerate was not a "safety stock" in a volatile market.

Declining issues outnumbered advancing ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.55-to-1 ratio favored decliners.

© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York

The S&P 500 posted 43 new 52-week highs and no new lows; the Nasdaq Composite recorded 173 new highs and 22 new lows.

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Ilya Atomiq
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