ALSO READTech stocks tug Wall Street lower; investors fret about U.S. tax cut delays Wall Street pulled lower by energy stocks, tax plan doubts Wall Street falls on tax bill worries; media stocks climb Wall Street set to open lower amid Russia probe, Fed pick Wall Street opens lower amid Russia probe, Fed pick
By Lewis Krauskopf
(Reuters) - Wall Street fell on Friday after an ABC News report that President Donald Trump's former national security adviser was prepared to testify that before taking office Trump had directed him to make contact with Russians.
The benchmark S&P 500 <.SPX> was down as much as 1.6 percent following the report involving former U.S. national security adviser Michael Flynn. Flynn pleaded guilty on Friday to lying to the FBI about Russia.
"This Flynn thing threw everything for a loop. We had that still against the backdrop of tax reform," said J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago.
"We are at all-time highs so sometimes when you do get news that's of a nature where people want to sell, it gets a little bit overdone," Kinahan said.
The Dow Jones Industrial Average <.DJI> fell 92.79 points, or 0.38 percent, to 24,179.56, the S&P 500 <.SPX> lost 12.38 points, or 0.47 percent, to 2,635.2 and the Nasdaq Composite <.IXIC> dropped 48.21 points, or 0.7 percent, to 6,825.77.
Steep sell-offs have been a rarity on Wall Street this year. The S&P 500 has closed down by at least 1 percent only four times in 2017.
The S&P has rallied some 18 percent this year, boosted by solid global economic data and strong U.S. corporate earnings. But with investors optimistic about some aspects of Trump's domestic agenda, especially tax cuts, news involving his administration has periodically rattled markets.
"We've kind of gotten used to the drama in the White House," said Rob Stein, CEO of Astor Investment Management in Chicago. "Whether or not they prove that there are Russian relationship ties, that doesn't have a long-term effect on the value of the stock market."
Energy <.SPNY> was the best-performing sector, rising 0.6 percent. Crude futures rose a day after OPEC and other major producers agreed to continue reining in output until the end of 2018 to try to reduce a global oil glut and boost prices.
Declining issues outnumbered advancing ones on the NYSE by a 1.28-to-1 ratio; on Nasdaq, a 2.17-to-1 ratio favoured decliners.
(Additional reporting by April Joyner in New York and Sruthi Shankar in Bengaluru; editing by Bernard Orr and Chizu Nomiyama)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)