US open: Wall Street opens down after political uncertainty in Italy rattles investors
Wall Street trading began with heavy losses on Tuesday as traders returned from the long weekend to find that fears surrounding political instability in Italy that had sent stocks in Europe tumbling a day earlier were rippling across the Atlantic.
At 1540 BST, the Dow Jones Industrial Average and S&P 500 had lost 0.81% to 24,552.26 and 0.73% to 2,701.35, respectively, while the Nasdaq had lost just 0.51% to 7,396.05.
Investors were seemingly wary given the prospect for a fresh set of elections in Italy after President Sergio Matarella intervened on Sunday to block the populist government coalition partners from installing an avowed euro-sceptic as their choice for finance minister. Instead, the Italian president named Carlo Cotarelli as the caretaker prime minister, but traders are nervous ahead of the next general election, which could come as early as August.
IG market analyst Joshua Mahony said: "Worries about the policies of a potential Five-star and League coalition have been replaced by fears the populist parties could make even further gains in new elections. The Italian President rejected the coalition's proposed appointment for finance minister on the basis of his Eurosceptic views.
"With the populist parties making great strides off the back of disenfranchised and dissatisfied Italians who wants a change from the status quo, we are likely to see any future election drive further gains for the Five-star and League parties, thus heightening the chance of a more radical upheaval."
In corporate news, Kinder Morgan shares were gaining 3.21% after the energy infrastructure company announced the sale of its Trans Mountain Pipeline system and expansion project to the Government of Canada for roughly $3.46bn.
CVR Energy lost 1.19% after raising its quarterly dividend by 50% to $0.75 per share and additive technology company Stratasys fell back 1% upon the revelation that its chief executive had stood down after less than two years in the role.
American Woodmark rocketed 16.21% after reporting a 10% rise in fourth-quarter profits and TransEnterix surged 16.61% after winning US Food and Drug Administration approval for expanded indications for its Senhance Surgical System.
On the data front, US house price growth was steady in March, according to the S&P/Case-Shiller national home price index.
The 20-city index was up 6.8% on the year, in line with the previous month but ahead of economists’ expectations of a 6.5% increase.
Meanwhile, the national home price NSA index covering all nine US census divisions was up 6.5% in March, also in line with February.
Elsewhere, the Dallas Fed manufacturing business index is still to come at 1530 BST.