Wall St. falls as election uncertainty rattles investors

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. October 31, 2016. REUTERS/Brendan McDermid

By Tanya Agrawal

U.S. stocks opened lower on Wednesday, with the S&P 500 falling for the seventh straight day as a tightening race for the White House prompted investors to seek safe-haven assets such as gold.

Investors are rethinking their long-held bets of a Nov. 8 victory for Democrat Hillary Clinton amid signs that her Republican rival Donald Trump could be closing the gap.

While Clinton held a 5 percentage point lead over Trump, according to a Reuters/Ipsos opinion poll released on Monday, some other polls showed her Republican rival ahead by 1-2 percentage points.

“As the polls change, the market is growing more nervous and is beginning to price in a Trump presidency,” said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.

“While Clinton represents a status quo, there is little clarity on what kind of impact Trump’s policies will have on trade and foreign policy.”

Gold XAU= hit a near one-month high earlier in the day, suggesting investor anxiety over the election.

Wall Street closed lower on Tuesday, with the S&P 500 ending the day at the lowest level since July 7. The index had breached a key technical level earlier in the session.

The selloff in equities comes as the Fed holds its two-day policy meeting, with a statement due at 2 p.m. ET.

While traders do not expect the central bank to raise interest rates just a week before the election, they are looking for clues that the Fed is set to hike rates in December.

Traders are pricing in a 73.6 percent chance of a December hike, according to CME Group’s FedWatch tool.

At 9:36 a.m. ET the Dow Jones industrial average .DJI was down 39.21 points, or 0.22 percent, at 17,997.89.

The S&P 500 .SPX was down 4.59 points, or 0.22 percent, at 2,107.13.

The Nasdaq Composite .IXIC was down 8.99 points, or 0.17 percent, at 5,144.59.

All 11 major S&P sectors were lower, with the rate-sensitive utilities index’s .SPLRCU 0.84 percent fall topping the decliners.

The energy index .SPNY was down 0.74 percent as crude oil prices fell for the fourth day after industry data showed a surprise build in U.S. stockpiles. Oil has lost 10 percent in the last two weeks. [O/R]

Data showed U.S. private employers added 147,000 jobs in October, falling short of expectations. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 165,000 jobs.

Third-quarter earnings of S&P 500 companies are expected to rise by 3.2 percent, according to Thomson Reuters I/B/E/S data, ending a year-long earnings recession.

Alibaba Group (BABA.N) shares rose 1.5 percent to $102.62 after the Chinese e-commerce firm’s second-quarter revenue beat estimates. Yahoo (YHOO.O), which has a 15 percent stake in Alibaba, was up 1 percent.

Brocade Communications (BRCD.O) was up 9.1 percent at $12.25 after chipmaker Broadcom (AVGO.O) said it would buy the company for $5.5 billion. Broadcom was up 1.1 percent at $170.50.

Tableau Software (DATA.N) fell 9.5 percent to $44.82 after the data analytics software maker reported lower-than-expected third-quarter revenue.

Declining issues outnumbered advancing ones on the NYSE by 1,716 to 855. On the Nasdaq, 1,312 issues fell and 819 advanced.

The S&P 500 index showed no new 52-week highs and five new lows, while the Nasdaq recorded six new highs and 29 new lows.

(Reporting by Tanya Agrawal; Editing by Anil D’Silva)

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