NEW YORK – Wall Street stocks tumbled on Monday (Sep 26) ahead of the first debate in the tightening US presidential campaign, and as worries about Deutsche Bank hit US financial stocks.
US-traded shares of the embattled German banking giant slumped 7.1 per cent on reports that Berlin has refused state aid to fortify its capital base. US banks also fell sharply.
Investors were also uneasy over the debate Monday night between Republican presidential nominee Donald Trump and Democrat Hillary Clinton, said Peter Cardillo, chief economist at First Standard Financial.
“The market is beginning to realise that it may not be an easy win for Clinton,” Cardillo said. “Normally a Republican win would be positive for the stock market, but with Trump it may create a lot of uncertainties.”
The Dow Jones Industrial Average dropped 166.62 points (0.91 per cent) to 18,094.83.
The broad-based S&P 500 lost 18.59 points (0.86 per cent) to 2,146.10, while the tech-rich Nasdaq Composite Index shed 48.26 points (0.91 per cent) to 5,257.49.
Large US banks were lower, with Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase all losing more than two per cent.
In addition to worries about Deutsche Bank, US financial stocks were hit by remarks from Fed Governor Daniel Tarullo that signaled that large US banks could be forced to hold billions of dollars in additional capital under stress tests.
Twitter climbed 3.3 per cent on a Bloomberg report that Disney is considering a bid for the microblogging service, adding to a growing list of potential suitors. Disney lost 1.4 per cent.
Dow member Nike declined 1.4 per cent as JPMorgan Chase lowered its price target for the athletic shoe and apparel maker due to sluggish demand in North America and rising competition from Adidas, Puma and Under Armour.
Pfizer shares fell 1.8 per cent after the drug manufacturer cancelled plans to split into two separate public companies, originally mulled as a way to maximise shareholder value.
Mylan lost 2.1 per cent after the Wall Street Journal reported that the drugmaker appears to have made higher profits off of its EpiPen drugs than its chief executive said last week in a congressional hearing.
The Journal said Mylan made about US$160 for an EpiPen two-pack compared with the US$100 claimed at last week’s hearing. Analysts questioned Mylan’s decision to deduct taxes from the computation, the newspaper said.