Wall Street drops; Pelosi says to start formal impeachment inquiry

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US stocks fell in volatile trade on Tuesday, giving the S&P 500 its biggest daily drop in a month as a push for the impeachment of US President Donald Trump gained momentum among Democrats in the US Congress.

After the bell, Democratic House Speaker Nancy Pelosi, as expected, said the House of Representatives will launch a formal inquiry into whether Trump should be impeached, saying actions taken by the Republican president had seriously violated the US Constitution.

The inquiry will examine whether Trump sought Ukraine’s help to smear former Vice President Joe Biden, the front-runner for the 2020 Democratic presidential nomination. Support among Democrats for the start of impeachment proceedings increased after news related to the charge.

Further pressuring Wall Street during Tuesday’s session, disappointing consumer confidence data underscored concerns over the economic impact of a prolonged US-China trade war.

Stocks briefly pared losses in late-afternoon trading after Trump, in a tweet, said his administration would release a complete transcript of a call with Ukrainian President Volodymyr Zelenskiy that is at the centre of the controversy.

He said the released transcript would show the call was “totally appropriate,” that he had not pressured Zelenskiy to investigate Biden, and that there had been no quid pro quo of US aid in exchange for a probe.

“What all of that combined is going to do is ensure there is going to be elevated (market) volatility in both directions in the next few days,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

The Cboe volatility index ended the session near a three-week high. The S&P 500 retail index fell 1.4%, while Amazon.com declined 2.4% and was the biggest drag on the S&P 500 and Nasdaq.

The Dow Jones Industrial Average fell 142.22 points, or 0.53%, to 26,807.77, the S&P 500 lost 25.18 points, or 0.84%, to 2,966.6 and the Nasdaq Composite dropped 118.84 points, or 1.46%, to 7,993.63.

Wall Street’s major indexes lost their footing early, when Trump took a harsh tone about China’s trade practices.

Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, said the trade war was likely a bigger issue than possible impeachment proceedings for the market right now.

“I don’t know how strong the case is for impeachment, so I don’t know what will happen with that. We react first and think later,” he said.

Nike Inc slipped ahead of the world’s largest sportswear maker’s first-quarter results after the bell. The shares rose about 5% following its results, which beat analysts’ expectations.

Declining issues outnumbered advancing ones on the NYSE by a 2.20-to-1 ratio; on Nasdaq, a 3.43-to-1 ratio favoured decliners.

The S&P 500 posted 31 new 52-week highs and two new lows; the Nasdaq Composite recorded 36 new highs and 96 new lows.

Volume on U.S. exchanges was 7.68 billion shares, compared to the 7.2 billion average for the full session over the last 20 trading days.The Great Diwali Discount!
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