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U.S. stocks edged lower in early Wednesday trade, as the stunning firing of Federal Bureau of Investigation Director James Comey stoked fresh questions about President Donald Trump’s to build enough consensus in Washington to implement market-friendly polices.
The Dow Jones Industrial Average DJIA, -0.25% fell 39 points, or 0.2%, to 20,936. The S&P 500 SPX, -0.10% lost about a 1 point, or less than 0.1%, at 2,395. The Nasdaq Composite Index COMP, -0.12% fell 4 points, or less than 0.1%, to 6,119.
On Tuesday, the Nasdaq ended at a record close while the S&P 500 finished about 0.1% from its own all-time closing high. The Dow is less than 1% below its record close, which was hit March 1. With valuations stretched by some metrics, equities could be vulnerable to prolonged uncertainty coming out of Washington, analysts said.
Trump said he dismissed the director of the Federal Bureau of Investigation over his handling of the investigation into Hillary Clinton’s emails. The reaction on Capitol Hill to Comey’s firing has ranged from approval to outrage.
“This certainly isn’t a positive, something that makes you want to go out and buy stocks, but it is too early to tell how big of a market-moving event this will prove to be,” said Bruce McCain, chief investment strategist at Key Private Bank. “To the extent it reflects a coverup or illegal action, that would be market moving, but we don’t know if that’s the case. Most of what I’ve seen thus far suggests the market is taking a wait-and-see attitude.”
Gold futures GCM7, +0.56% were 0.6% higher, while the dollar USDJPY, -0.11% was down slightly against the yen, changing hands at ¥113.87 compared with ¥113.87 late Tuesday. The buck had been as low as ¥113.63 earlier. Both gold and the yen are seen as safe-haven trades in times of uncertainty.
Other markets: Oil futures CLM7, +1.39% rose more than 1%, getting some respite from the sellers after an industry group reported a drop in U.S. crude supplies. Shares of Chevron Corp. CVX, +0.99% rose 0.6% as the biggest advancing stock on the Dow industrials.
“At these levels, you’re probably at a good equilibrium for oil. I don’t think it will be driven dramatically higher or lower in the near-term,” McCain said.
Economic news: Boston Federal Reserve President Eric Rosengren is slated to speak at noon Eastern Time to the Lake Champlain Chamber of Commerce in Vermont.
In the latest economic data, import prices rose 0.5% in April, while export prices were up 0.2%. Both were higher than expected. Separately, a release on the federal budget is on tap for 2 p.m.
Check out: MarketWatch’s Economic Calendar
Stock movers: Abercrombie & Fitch Co. shares ANF, +10.89% jumped 11% in heavy trading following a Reuters report the retailer was fielding buyout interest.
Fashion-accessories maker Fossil Group Inc. FOSL, -24.63% and online reviews providerYelp Inc. YELP, -19.80% both plummeted following disappointing quarterly results. Shares of Fossil were down 19% while Yelp shed 21%.
Read the First Take: Yelp plummets as advertisers revolt
Entertainment titan Walt Disney Co. DIS, -3.31% was down 2.5% after posting earnings that topped forecasts, but revenue that missed views. The stock was by far the biggest decliner among Dow components.
Inc. Research Holdings INCR, +16.55% reached a deal to combine with private-equity owned inVentiv Health, creating a large biopharmaceutical outsourcing provider. The agreement values inVentiv at $4.6 billion, including debt. Shares of Inc. gained 14%.