While you were sleeping: Stocks slide before debate
Sept. 27 (BusinessDesk) - Wall Street fell ahead of the first US presidential debate between candidates Hillary Clinton and Donald Trump.
"Wall Street favours Hillary at this point because she is a known commodity. Trump is a wild card,"Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, told Reuters. "But I don't think it's too late for Wall Street to warm up to Trump."
In 2.54pm trading in New York, the Dow Jones Industrial Average shed 0.84 percent, while the Nasdaq Composite Index slid 0.82 percent. In 2.39pm trading, the Standard & Poor’s 500 Index declined 0.85 percent.
Half of America's likely voters will rely on the presidential debates to help them make their choice between Republican Donald Trump and Democrat Hillary Clinton in the November 8 election, according to Reuters, citing a Reuters/Ipsos poll released on Monday.
A Bloomberg poll on Monday showed the two candidates were at 46 per cent each in a direct election. And with third-party candidates added to the mix, Trump was leading Clinton 43 to 41 per cent.
Slides in shares of JPMorgan Chase and those of Goldman Sachs, down 2.5 percent each, led the drop in the Dow.
Banks fell on both sides of the Atlantic. Shares of Deutsche Bank sank to a record, closing 7.5 percent lower, amid speculation Germany’s largest lender would need to raise capital to settle claims in a dispute with the US Department of Justice, which is seeking US$14 billion.
German Chancellor Angela Merkel had ruled out state aid to Deutsche Bank, the country's magazine Focus reported on the weekend. The bank on Monday said it did not seek help and did not need a capital increase, according to media reports.
“The drama around Deutsche Bank puts the European financial sector in the spotlight once again,”Michael Woischneck, senior equities manager at Lampe Asset Management in Dusseldorf, Germany, told Bloomberg. “It makes you wonder what the situation is like at other banks with significant capital-markets activities. We’re also entering a quarter with a lot of political event risks, and I’d expect big swings in volatility.”
Meanwhile, investors are eyeing the latest merger and acquisition news.
The Walt Disney Co is working with a financial adviser to evaluate a possible bid for Twitter, Bloomberg reported, citing people familiar with the matter. After receiving interest in discussing a deal, Twitter has started a process to evaluate a potential sale.
Salesforce.com is also considering a bid, working with Bank of America on the process, Bloomberg reported, citing other people, who declined to be named because the matter is private.
Twitter shares traded 1.1 percent stronger as of 3.04pm in New York, while those of Walt Disney fell 1.7 percent, and Salesforce.com shares traded 0.1 percent weaker.