Trump travel curbs slam stocks, hit dollar vs. yen
By Herbert Lash
NEW YORK (Reuters) - Major world equity markets fell on Monday and the dollar slipped against the safe-haven yen after new U.S. immigration curbs stirred concerns about the impact of U.S. President Donald Trump's policies on global trade and the economy.
Stocks posted their worse day so far this year on Wall Street after Trump's executive order on Friday, to bar Syrian refugees and suspend travel to the United States from seven countries, put the spotlight back on his protectionist bent.
The dollar fell against the yen as investors sought the traditional security of the Japanese currency, and gold edged higher amid heightened political uncertainty. Gold futures rose 0.4 percent to settle at $1,193.20 an ounce, while the dollar slipped 1.18 percent to 113.70 yen.
The negative reaction to Trump's orders cooled a rally that had lifted U.S. equities to a series of record highs following the president's election in November, encouraged by promises of tax cuts and simpler regulations. However, the potential risk from some of Trump's policies have dampened enthusiasm.
The CBOE Volatility index, known as Wall Street's "fear gauge," rose 1.32 points to 11.90 from multi-year lows.
Investor enthusiasm over expectations of a pro-business Trump agenda, especially tax and regulatory reforms, had spurred the rally, said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
"These two things were most important," Meckler said. "We seem totally caught up now in immigration reform and travel restrictions. Those are not things the business community is necessarily excited about."
Peter Cardillo, chief market economist at First Standard Financial in New York, said that investors had focused on Trump's pro-growth of proposals and ignored anything detrimental to economic activity, such as protectionism. Continued...