Wednesday, May 17, 2017

Stocks Tumble Amid Washington Turmoil

Stocks in the United States were down sharply in midday trading. The Dow Jones industrial average, the Nasdaq and the Standard & Poor’s 500-stock index each were down more than one percent.
Among the reasons for the sudden skittishness:
• Continued turmoil in Washington. New revelations about President Trump’s sharing of sensitive information with Russian diplomats, and his reported suggestion that former F.B.I. director James B. Comey drop his investigation into former national security adviser Michael T. Flynn are raising fears that Mr. Trump’s agenda of lower taxes and lighter regulation could be harder to enact.
• Underlying weakness in the economy. While strong tech stocks have been inflating the major indexes in recent months, some key companies for the American economy — especially retailers and carmakers — are facing real struggles.
The dollar was weaker against other major currencies on Wednesday.
And Wall Street’s fear gauge is up. After hitting historic lows, the Chicago Board Options Exchange volatility index, or VIX, spiked 20 percent in early trading on Wednesday, although the index remains well below its historical average.

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