Dow Drops Nearly 200 Points
Nervousness over President Trump’s order to tighten immigration rules and Friday’s U.S. growth data drive downbeat tone
By Riva Gold and Gunjan Banerji Updated Jan. 30, 2017 11:47 a.m. ET
U.S. stocks tumbled Monday, sending the Dow Jones Industrial Average down nearly 200 points in what was shaping up to be its worst day since the election.
Some analysts pointed to nervousness surrounding President Donald Trump’s order to tighten immigration rules and Friday’s U.S. growth data as catalysts for the downbeat tone in global equity markets.
The Dow Jones Industrial Average slid 177 points, or 0.9%, to 19917 and the S&P 500 fell 0.9%, putting both indexes on track for their biggest percentage declines since Oct. 11. The Nasdaq Composite dropped 1.1%, weighed down by a decline in tech shares.
Wall Street’s “fear gauge,” the CBOE Volatility Index, or VIX, rose 18% to 12.49 Monday—on track for its biggest jump since September. On Friday, it had closed at 10.58, its lowest level since 2014.
Monday’s selloff was connected with some of the controversy, protests and dissension among Republicans “about the decision to so quickly implement the immigration ban over the weekend,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management.
Mr. Trump’s executive order restricting immigration from seven Muslim-majority countries spawned legal challenges, congressional criticism and widespread protests in recent days.
Shares of airlines were among the biggest decliners. American Airlines Group fell 6%, United Continental Holdings declined 5% and Delta Air Lines fell 3.8%. Delta said its essential information technology systems were restored following an outage Sunday, but said it scrubbed more flights Monday and warned that further cancellations were possible.
The outage occurred amid demonstrations at many airports across the country in opposition to Mr. Trump’s executive order.
“Markets expected a much more stimulus-driven policy agenda rather than a more protectionist-driven policy agenda,” said Charles Hepworth, investment director at a Swiss money manager GAM.
For investors, “the fact he is actually doing this [travel ban] is just a conscious reset that actually he is probably as aggressive as he sounds,” he said.
Technology-industry leaders criticized the temporary ban, expressing concerns about the order’s effects on their employees.
The technology sector of the S&P 500 shed 1% Monday.
Shares of financial companies, some of the biggest winners since Election Day, slid 1.3%.
The moves came after the Dow industrials slipped Friday but still posted their best week since December as investors reacted to corporate earnings and Mr. Trump’s first week in office.
Many investors had bet the new administration would quickly reduce taxes, cut back regulations and shore up U.S. growth, driving the blue-chip index past the 20000 mark for the first time.
“I think the market has run a bit ahead of itself on optimism at this point,” said Tom Siomades, head of Hartford Funds Investment Consulting Group. “We’re at the point right now where people are sort of waiting for what the details are going to be.”
Still to come this week: fresh readings on the global economy, updates from the world’s largest companies and meetings of the Federal Reserve and Bank of Japan. More than 100 large U.S. companies are set to report quarterly results, including Facebook and Apple.
The yield on the 10-year U.S. Treasury was recently at 2.471% on Monday, compared with 2.480% Friday, according to Tradeweb. Yields fall as bond prices rise. The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, fell around 0.3% after five weeks of declines.
A file photo of the New York Stock Exchange. Futures pointed to a 0.2% opening decline for the Dow Jones Industrial Average.
A file photo of the New York Stock Exchange. Futures pointed to a 0.2% opening decline for the Dow Jones Industrial Average. Photo: Associated Press
Elsewhere, the Stoxx Europe 600 shed 1%, with economically sensitive corners of the market, such as banks, energy and insurance companies, leading declines. Australia’s S&P/ASX 200 fell 0.9%, its worst day so far this year, while Japan’s Nikkei Stock Average fell 0.5%.
Markets in China, Hong Kong and South Korea were closed for the Lunar New Year holiday.
—Suryatapa Bhattacharya contributed to this article
Write to Riva Gold at
riva.gold@wsj.com and Gunjan Banerji at
Gunjan.Banerji@wsj.com