U.S. Stocks Tumble as FBI Memo Calls Trump Agenda Into Question

(Bloomberg) -- U.S. stocks fell as investors assessed the fallout from a report alleging President Donald Trump asked then-FBI Director James Comey to drop an investigation into a former top official.

The S&P 500 Index fell 0.7 percent to 2,384 at 9:50 a.m. in New York, the biggest drop in more than a month. The Dow Jones Industrial Average declined 0.8 percent to 20,818. The S&P 500 index, up 11 percent since Trump was elected in November, slipped 0.1 percent Tuesday after touching a new intraday high of 2,405.77.

• Real estate and utility shares only groups higher as 10 year drops 7 bps
• Financials down 1.7%, most among in the market; industrials fall 1.1%
• VIX up 17% to 12.4 for biggest jump since September
• Volume in S&P 500 36% above 30-day average
• The dollar, already in retreat after an earlier report said Trump shared terrorism intelligence with Russian officials, continued its decline
• POLITICS:
  • A memo written by then-FBI Director James Comey surfaced Tuesday, alleging that the president asked him to drop an investigation of former National Security Adviser Michael Flynn
  • Investors had already been keeping an eye on developments in the White House, amid the president’s firing of Comey a week ago and a report Monday that Trump disclosed sensitive intelligence to Russian officials
• ECONOMY:
  • MBA mortgage applications index fell 4.1% in week ended May 12 after rising 2.4% in prior week
• EARNINGS:
  • More than 90% of S&P 500 companies have reported earnings already this season. Of those, 78% exceeded profit projections and 64% topped sales estimates, data compiled by Bloomberg show
  • After-market Wednesday: Cisco Systems (CSCO), L Brands (LB), Synopsys (SNPS)
  • Pre-market Thursday: Wal-Mart (WMT), Ralph Lauren (RL)

For more equity market news:

• Trump Sends U.S. Stock Volatility Surging Versus Europe: Chart
• Market Not Yet Pricing Major Delay in Trump Agenda: Miller Tabak
• Attention Smart Beta Shoppers: Don’t Commit This Investing Sin

To contact the reporter on this story: Oliver Renick in New York at orenick2@bloomberg.net.

To contact the editors responsible for this story: Chris Nagi at chrisnagi@bloomberg.net, Richard Richtmyer