Tech shares fell the most leading the losses
U.S. stock indices ended lower on Monday, 25 September 2017 on the back of a fresh flare up in tensions between the U.S. and North Korea and a sharp decline in technology shares. The U.S. equity market slipped on Monday as investors dialed back their technology holdings with just a few days left in the third quarter.
The Dow Jones Industrial Average slipped 53.50 points, or 0.2%, to 22,296.09. Nasdaq Composite fell 56.33 points, or 0.9%, to 6,370.59. The S&P 500 index relinquished 5.56 points, or 0.2%, to 2,496.66, with six of the main 11 sectors ending lower.
Tech shares fell the most leading the losses.
Among Dow components, Visa and Microsoft led losses.
In the tech sector, Apple shares fell 0.9%, marking the iPhone maker's fourth straight down day.
North Korean foreign minister Ri Yong Ho, speaking in New York on Monday, described President Donald Trump's recent comments about North Korea as clearly a declaration of war. The main indexes added to losses immediately after the foreign minister's comments.
On Monday, data showed that the Chicago Fed national activity index for August dropped to -0.31 from 0.03 in July.
Investors also focused on looking for more monetary policy clues from the Federal Reserve, which last week announced it will begin to unwind its more than $4 trillion balance sheet in October.
On Monday, New York Fed President William Dudley said firmer import prices as well as the fading effect from a number of temporary, idiosyncratic factors will boost inflation over the next year or so and stabilize at around Fed's 2% target.
There are plenty of data releases on tap this week, including durable goods and consumer spending.
Bullion metals ended higher at Comex on Monday, 25 September 2017. Gold finished sharply higher on Monday, recouping roughly half of last week's loss, as declines in the U.S. stock market and growing tensions between the U.S. and North Korea lifted prices for the yellow metal to the highest settlement in more than week.
December gold rose $14, or 1.1%, to settle at $1,311.50 an ounce. Prices, lost about 2.1% last week. December silver rose 1% to $17.147 an ounce.
On Monday, the ICE U.S. Dollar Index which measures the buck against a half-dozen currencies, was up 0.5%. The dollar strengthened against the euro, which was under pressure after a heavy drop in support for mainstream parties in Germany's general election on Sunday left the way forward in doubt for German Chancellor Angela Merkel's conservative alliance.
On Monday, Chicago Fed President Charles Evans said the central bank should hold monetary policy steady until there are clear signs of building wage and price pressures.
Crude-oil prices settled sharply higher on Monday, 25 September 2017 at Nymex lifting Brent crude to a more than two-year high and West Texas Intermediate crude into a bull market and its highest finish in about five months. Prices found support, with WTI climbing by more than 20% from lows in June as data showed major producers' strong commitment to their agreement to cut output and as talk of a likely extension of the deal grows.
October West Texas Intermediate crude tacked on $1.56, or 3.1%, to settle at $52.22 a barrel on the New York Mercantile Exchange. Prices saw their highest settlement since mid-April and stand at about 22% above the lows seen in June.
November Brent, the global benchmark, climbed $2.16, or 3.8%, at $59.02 a barrel on the ICE Futures Europe exchange. That was the highest front-month contract finish since early July 2015.
OPEC and 10 producers outside the cartel, including Russia, first agreed late in 2016 to cap their production at around 1.8 million barrels a day lower than peak October 2016 levels, with the aim of alleviating global oversupply and boosting prices. The deal was extended in May through March 2018. Over the past few weeks, a number of signatories to the deal have indicated a willingness to hold back production potentially through 2018. An OPEC-led committee that met Friday boasted record compliance of 116% in August for the OPEC and non-OPEC countries that are part of the agreement.
U.S. Treasuries held gains in the early morning and then advanced to new session highs. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, slipped four basis points to 2.22%, settling near its session low. The 2-yr yield held up a bit better, finishing just one basis point below its flat line at 1.42%.
On Tuesday, market participants will receive several economic reports, including the Case-Shiller 20-City Composite Home Price Index for July (consensus +5.8%) at 9:00 ET, the Conference Board's Consumer Confidence Index for September ( consensus 119.4) at 10:00 ET, and August New Home Sales (consensus 577K) also at 10:00 ET.
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