LDN - Business

Wall Street set to open lower on Trump's North Korea comment

[August 30, 2017] By Sruthi Shankar and Tanya Agrawal

(Reuters) - U.S. stocks were set to open slightly lower on Wednesday after President Donald Trump's latest tweet on North Korea reignited concerns over tensions escalating with the nuclear-armed country.

On Tuesday, all major indexes ended higher recovering from steep losses at the open after Trump responded to North Korea's missile test over Japan that "all options are on the table".

But, Trump tweeted on Wednesday that the "U.S. has been talking to North Korea, and paying them extortion money, for 25 years. Talking is not the answer."

"We suspect the North Korea problem, although not yet causing a rush to exit will eventually take a negative toll on the markets," said Peter Cardillo, chief market economist at First Standard Financial.

Investors will closely watch Trump's first speech specifically on tax policy later in the day. The speech, officials said, would be about "why" reforming the tax code was needed, not about "how" to reform it.

"Trump's outline of tax reform today is likely to be well received by the markets," Cardillo said.

Meanwhile, Tropical Storm Harvey made its second landfall in Louisiana on Wednesday, pouring down more water after setting rainfall records in Texas.

Crude oil prices slid, while gasoline futures hit their highest since mid-2015 on Wednesday as flooding and damage from Harvey shut over a fifth of U.S. refineries. [O/R]

Gross domestic product increased at a 3.0 rate in the April-June period, the Commerce Department said in its second estimate.

The upward revision from the 2.6 percent pace reported last month reflected robust consumer spending as well as strong business investment.

[to top of second column]

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 25, 2017. REUTERS/Brendan McDermid

Another report by payroll processor ADP showed U.S. private employers added 237,000 jobs in August for its biggest monthly increase in five months, above the 183,000 jobs expected by economists.

The ADP report comes ahead of the more comprehensive government payrolls data for August on Friday.

At 8:55 a.m. ET (1255 GMT), Dow e-minis <1YMc1> were down 13 points, or 0.06 percent, with 25,992 contracts changing hands.

S&P 500 e-minis <ESc1> were down 2.5 points, or 0.1 percent, with 169,604 contracts traded.

Nasdaq 100 e-minis <NQc1> were down 3.25 points, or 0.06 percent, on volume of 41,793 contracts.

Federal Reserve Board Governor Jerome Powell, a permanent voting member on the Fed's rate-setting committee, is scheduled to make an appearance at 9:15 a.m. ET.

Among stocks, shares of Bank of America <BAC.N> were up 0.51 percent in premarket trading after Warren Buffett's Berkshire Hathaway <BRKa.N> became the largest shareholder.

Chico's FAS <CHS.N> tanked 13.15 percent after the apparel retailer forecast gross margin declines and a bigger drop in full-year comparable sales.

Dycom Industries <DY.N> slumped 18.39 percent after the broadband fiber installer's forecast missed expectations.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

Back to top