Verizon Communications fell 5.1 per cent after the telecom replaced its chief executive. Dan Schulman, a director at the company and former CEO of PayPal, is taking over for Hans Vestburg.
Elsewhere on Wall Street, trading was relatively quiet as the stock market continues to largely ignore the US government’s shutdown. Past closures of the federal government have had minimal effect on the stock market or on the economy, and the bet on Wall Street is that something similar will happen again.
Politics are playing a more active role in stock markets abroad, as Japanese stocks soared and French stocks slumped following their latest political shake-ups.
Japan’s Nikkei 225 jumped 4.8 per cent after the country’s Liberal Democratic Party chose Sanae Takaichi as its leader. She was an ally of the late Prime Minister Shinzo Abe, who pushed for lower interest rates and market-friendly policies.
The yen’s value dropped against the US dollar on expectations that Takaichi will boost spending, likely adding to inflationary pressures. That in turn helped push up stocks of Japanese exporters, whose products can become more attractive on the global market because of a cheaper yen.
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“Obviously, investors like what she has been saying and certainly today judging by the number of stocks that moved and which stocks moved, it seems like pretty much led by foreigners so far,” Neil Newman, head of strategy at Astris Advisory Japan, said about Takaichi.
In Paris, the CAC 40 index slumped 1.4 per cent following the resignation of France’s new prime minister.
Sébastien Lecornu resigned a day after he named his government, drawing a backlash across the political spectrum for his choice of ministers. French politics have been in disarray since President Emmanuel Macron called snap elections last year that produced a deeply fragmented legislature.
In the bond market, the yield on the 10-year Treasury rose to 4.16 per cent from 4.13 per cent late Friday.
The shutdown of the U.S. government likely means delays for U.S. economic reports scheduled for this week, though investors will have some earnings reports to comb through, including from Delta Air Lines, PepsiCo and Levi Strauss.
Despite the shutdown, the Federal Reserve will release minutes from its meeting last month, when it cut its benchmark interest rate for the first time this year. Much on Wall Street is riding on expectations that the Fed will continue cutting interest rates through this year and into next.
AP
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