Wall Street falls the most this year as Trump honeymoon sours
NEW YORK Major U.S. stock indexes posted their largest drop so far in 2017 on Monday as investors worried that a curb on immigration ordered by Donald Trump was a reminder that some of the U.S. president’s policies are not market-friendly.
An executive order issued by Trump on Friday banned immigration from seven Muslim-majority countries, including legal residents and visa holders, and temporarily halted the entry of refugees. Over the weekend, thousands of people rallied in major U.S. cities and at airports in protest.
U.S. equities had hit a series of record highs following Trump’s election in November, encouraged by his promise of tax cuts and simpler regulations.
“Investors focused on the pro-growth of (Trump’s) proposals and not those detrimental to economic activity, like protectionism,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
He said investors wore blinders to only see the market-friendly policies Trump spoke about during the campaign and the immigration ban was a reminder of actions he could take that could undermine the economy.
Technology, a sector which has openly opposed bans on immigration and hurdles to hiring foreign talent, weighed the most on the SP 500.
The Dow Jones Industrial Average .DJI fell 122.65 points, or 0.61 percent, to close at 19,971.13, the SP 500 .SPX lost 13.79 points, or 0.60 percent, to 2,280.9 and the Nasdaq Composite .IXIC dropped 47.07 points, or 0.83 percent, to 5,613.71.
It was the largest daily percentage drop for the Dow since October, while the SP and Nasdaq dropped the most since late December.
Earlier, Trump signed an executive order that would seek to pare back federal regulations by requiring agencies to cut two existing regulations for every new rule introduced.
In an event with small business leaders, Trump took credit for the market rally since Nov. 8:
“The stock market has gone up massively since the election. Everyone’s saying ‘Oh, the market will go down.’ I said ‘The market’s not going down’.”
The Russell 2000 index of small and mid-cap companies fell 1.3 percent Monday, giving back all of January’s gains.
The CBOE Volatility index .VIX or Wall Street’s “fear gauge” rose 1.30 points, the most for
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