Wall Street Flat as North Korea, White House Worries Linger

(Reuters) -
stocks, markets, wall street
(AP Photo/Seth Wenig, File)

U.S. stocks were mostly flat in early afternoon trading on Monday amid concerns over the recent turmoil in the White House and simmering tensions between the United States and North Korea.

Last week, President Donald Trump fired chief strategist Steve Bannon and disbanded some business councils, among other political maneuvers, that led to rising concerns about the Trump administration’s ability to implement its pro-growth agenda of tax cuts and infrastructure spending.

While the benchmark S&P 500 index is still up 13.6 percent since the election, it had fallen 2.1 percent in the last two weeks. That’s the most since the fortnight before the election.

Part of the recent decline was due to escalating tensions between the United States and North Korea. While that has eased slightly in the past few days, South Korean and U.S. forces began computer-simulated military exercises on Monday.

“I think (the market’s decline) is a continuation of the weakness we’ve seen in the last couple of weeks,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

“We have come off a really strong period for the market and are really just digesting the gains.”

At 12:36 p.m. ET (1636 GMT), the Dow Jones Industrial Average was up 20.61 points, or 0.1 percent, at 21,695.12 and the S&P 500 was up 4.41 points, or 0.18 percent, at 2,429.96.

The Nasdaq Composite was up 0.15 points, or 0 percent, at 6,216.68.

The Dow fell below its 50-day moving average, meaning that all three indexes were trading below the key technical measure on the same day for the first time since April 18.

Three of the 11 S&P sectors were lower, led by the energy index’s 0.66 percent drop as crude oil prices fell nearly 2 percent, pulling back from last week’s rally.

Defensive sectors such as real estate and telecommunications were the top gainers.

Nike’s shares fell 2.4 percent, the most among the 30 Dow components, after Jefferies cut its rating and price target on the stock.

Johnson Controls rose 2.3 percent, among the top S&P gainers, after saying its CEO change would happen earlier than announced.

Herbalife was up 10.93 percent at $68.72 after the nutritional supplement maker said it would buy back $600 million of shares after ending talks to be taken private.

Advancing issues outnumbered decliners on the NYSE by 1,426 to 1,358. On the Nasdaq, 1,611 issues fell and 1,182 advanced.