Category: Stock Market News

President Donald Trump knew weeks before his inauguration that Mike Flynn was under investigation for secretly working as a paid lobbyist for Turkey, but hired him as national security adviser anyway, according to a New York Times report Wednesday night. Flynn notified the Trump transition team in early January, about a month after he learned he was under investigation, the Times said. Flynn was ousted from his post after just 24 days, and has since registered as a foreign agent. The New York Times reported Tuesday that Trump asked then-FBI Director James Comey to drop the Flynn investigation the day after he resigned. Meanwhile, a separate report by NBC News said Flynn and former Trump campaign manager Paul Manafort are the key figures in the FBI investigation into Russian campaign meddling. NBC News said multiple grand jury subpoenas and records requests concerning the two have been made over the past six months. That investigation will now be taken over by former FBI Director Robert Mueller, who on Wednesday was named special counsel to lead the Russia probe.

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Former FBI Director Robert Mueller has been named special counsel to oversee the FBI’s investigation into ties between President Donald Trump’s associates and Russia. Deputy Attorney General Rod Rosenstein announced the appointment late Wednesday. Congressional Democrats had been calling for weeks for an independent investigator to lead the politically charged probe. Mueller, who ran the FBI from 2001 to 2013, had wide bipartisan support and had a reputation for his independence.

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Cisco Systems Inc. said in an earnings report Wednesday that it would add 1,100 layoffs to its previously announced total of 5,500. Reports ahead of the original announcement suggested Cisco would lay off 14,000 people. The news came as Cisco provided a weak forecast that hurt its stock, and Chief Executive Chuck Robbins said in a conference call that a slowdown in federal government spending was a large factor in its guidance. Robbins said that lack of budget visibility was hurting Cisco’s large business with the U.S. federal government, with about 1 point of the 4% to 6% revenue decline Cisco guided for attributable to that business. Cisco’s stock dropped even more after Robbins laid out the reasons, with shares declining more than 7.5% in late trading.

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The U.S. stock market Wednesday booked its worst daily decline in months, as concerns about President Donald Trump’s FBI controversy weighed on investor sentiment. The Dow Jones Industrial Average shed 1.8% at 20,606, its sharpest decline since Sept. 9, according to FactSet data. The S&P 500 index ended off 1.8% at 2,357, also marking its worst daily drop since Sept. 9. Meanwhile, the technology-laden Nasdaq Composite Index coughed up 2.6% at 6,011, its steepest one-day fall since June 24, the day after U.K. citizens voted to exit from the European Union. The downdraft came on a so-called risk-off day for Wall Street, in which haven assets like the 10-year Treasury note [BX: TMUBMUSD10Y] drew bidders and pushed yields, which move inversely to prices, firmly lower. The 10-year Treasury note was off 10 basis points at 2.22%, and gold futures , another flight-to-safety security, settled sharply higher at $1,258.70 an ounce, representing its highest level in May. Weakness came after the New York Times late Tuesday reported that Trump in February asked the then–director of the Federal Bureau of Investigation, James Comey, to stop his investigation into former national-security adviser Michael Flynn. The report cited a memo from Comey. That has raised questions about the president’s ability to pursue the pro-market policies whose prospects for implementation have driven stocks to record levels.

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Cisco Systems Inc. shares dropped in late trading Wednesday after the networking giant said revenue would decline at a faster rate in the current quarter. Cisco beat earnings estimates for its fiscal third quarter, reporting net income of $2.52 billion, or 50 cents a share, on sales of $11.94 billion. After adjusting for stock-based compensation and other effects, Cisco claimed earnings of 60 cents a share. Analysts on average expected adjusted earnings of 58 cents a share on sales of $11.9 billion, according to FactSet. The company said that revenue for the current quarter would decrease 4% to 6% year-over-year, however, after a 1% decline in the previous quarter. That suggests a revenue total of $11.9 billion to $12.1 billion, while analysts were forecasting a sales total of $12.5 billion on average, according to FactSet. Cisco said it expects adjusted earnings in a range of 60 cents to 62 cents a share for the current quarter, while analysts expect 62 cents a share on average. Cisco stock fell more than 5% in late trading after closing with a 1.4% decline at $33.83. Shares have gained 27.2% in the past year, while the S&P 500 index has increased 17.3% in that time.

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Shares of Ford Motor Co. slid to a 4 1/2-year closing low Wednesday, after the auto maker confirmed that it was slashing its workforce by about 10%, or about 1,400 jobs, in a cost-cutting move. The stock dropped 1.7% to end the day at $10.76, the lowest close since it closed at $10.50 on Nov. 16, 2012. In comparison, rival General Motors Co. shares slid 3.0% to close at a 6-month low. Ford’s stock has now tumbled 14.5% over the past three months, during which Ford issued a profit warning in mid March. Over the same time, GM shares have lost 12.9%, while the S&P 500 has inched up 0.3%.

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Shares of Vertex Pharmaceuticals Inc. rose more than 1% late Wednesday after the company said the U.S. Food and Drug Administration has approved one of its drugs for the treatment of certain mutations of the gene that causes cystic fibrosis. The company increased its sales expectations for the drug, called Kalydeco, to between $740 million and $770 million this year. Vertex said it is continuing to talk with the FDA about approving the drug to other mutations. The shares had ended the regular session down 3.1%.

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The S&P 500 and Dow industrials on Wednesday posted their largest one-day decline since September as fears over the fallout from turmoil in Washington prompted investors to unload risky assets such as equities. Investors grew increasingly concerned that political turmoil in Washington would delay or prevent President Donald Trump’s tax reforms and other fiscal stimulus measures. The selloff on Wall Street was broad-based, with investors fleeing to government bonds and defensive equities such as utilities and real estate. The Dow Jones Industrial Average shed 372.82 points, or 1.8%, to 20,606.93. The S&P 500 slumped 43.64 points, or 1.8%, to 2,357.03. The Nasdaq Composite Index lost 158.63 points, or 2.6%, to 6,011.24, its largest one-day decline since last June. The CBOE Volatility Index surged 40%, biggest one-day increase since last September. Financials were among the worst hit, with the sector down 3%, while nine of the 11 main sectors were down more than 1%. Goldman Sachs Group Inc. lost 5.5% while Bank of America sank 6%.

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Wall Street expectations for an increase in benchmarks interest rates next month by the Federal Reserve fell on Wednesday, as U.S. stocks suffered the worst daily drop in months on concerns President Donald Trump’s pro-growth legislative agenda was in jeopardy. Federal-funds futures were indicating that the market was pricing in a 64.6% probability of a rate hike at the Fed’s two-day meeting starting June 13-14. That is down from expectations as high as about 90% just last week and 74% on Tuesday, according to the CME Group’s data. The current levels still imply a strong likelihood of a rate increase as the Janet Yellen’s Fed aims to normalize monetary policy, but significantly lower. The downshift for the rate-hike outlook comes as so-called risk assets, notably stocks, are tumbling sharply, along with yields for government bonds. Reports alleging that Trump tried to influence an FBI probe into members of his presidential campaign and Russia by requesting that then-director of the Federal Bureau of Investigation, James Comey, end an investigation into former National Security Adviser Michael Flynn has intensified doubts that the president will be able to implement a host of market-friendly policies that had been at the heart of the runup in risk assets in recent months. The Dow Jones Industrial Average was off 1.5% at 20,661, putting it on pace to log its worst one-day drop in eight months. The S&P 500 index and the Nasdaq Composite Index also were on track for their sharpest declines since September. Financial stocks have been at the center of Wednesday’s storm with shares of Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. cutting more than 100 points from Dow, combined. Lower interest rates can undercut a bank’s lending model. The yield on government bonds have been near their lowest levels in three weeks, with the 10-year Treasury note [BX:TMUBMUSD10Y] yielding 2.22%. Yields, which move inversely to prices, tend to fall in times of uncertainty and as expectations for rate hikes decline.

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Former Sen. Joe Lieberman is among the candidates President Donald Trump will interview to replace James Comey as the head of the Federal Bureau of Investigation, White House press secretary Sean Spicer said Wednesday. Spicer said the others are current Acting FBI Director Andrew McCabe, former Oklahoma Gov. Frank Keating and Richard McFeely, a former top FBI official. Trump fired Comey on May 9. Lieberman, now an independent, was the Democratic nominee for vice president in 2000, running with Al Gore.

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