Wall Street falls, rankled by fear of ‘hard Brexit’

U.S. stocks fell on Tuesday as investors fretted about Britain’s exit from the European Union and the prospect of a Federal Reserve interest rate hike in coming months.

It was the second straight session of losses on Wall Street, where investors were already on edge due to the uncertainty of a tight race ahead of the Nov. 8 presidential election.

Sterling slid to its lowest in more than three decades after British Prime Minister Theresa May said the country’s divorce from the EU will not be “plain sailing” and that there would be “bumps in the road.”

While the weaker pound sent UK stocks surging, it raised worries among U.S. investors.

“Clearly there has been some reverberation from across the pond in terms of the prospect for a slightly more disorderly UK separation from the EU,” said Bill Northey, chief investment officer for the private client group at U.S. Bank in Helena, Montana.

Angst about future interest rate hikes also returned to the fore after Richmond Federal Reserve President Jeffrey Lacker said he would have voted in favor of an increase at the latest policy meeting had he been able to do so.

Traders have priced in a 63 percent chance of the Fed raising interest rates in December, according to the CME Group’s FedWatch tool.

Meanwhile, the International Monetary Fund (IMF) lowered its 2016 growth forecast for the U.S. economy to 1.6 percent from 2.2 percent and painted a gloomy picture of the global economy.

Ten of the 11 major S&P 500 indexes fell, with the high dividend-paying utilities sector .SPLRCU falling 2.26 percent and telecom services .SPLRCL down 2.03 percent.

At 2:18 pm ET, the Dow Jones industrial average .DJI was down 0.54 percent at 18,155.54 points and the S&P 500 .SPX had lost 0.51 percent to 2,150.08.

 

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source: https://www.yahoo.com/news/trump-clinton-watergate-over-again-000000687.html

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