The Dow took a hit today falling 234 points on heavy trade to close at 21,753. Banks and tech were lower while utilities were up.
The relative calm of the Labor Day weekend was shattered by events in the geopolitical theater that are giving us a huge news cycle. With” NoKo Nucs”, Harvey, Irma, DACA, tax reform and last but not least the debt ceiling, there is no shortage of reasons to get a bit nervous. One market guru said the most volatile month of the year was September which is when everyone gets back to work. He might be right but as Will Rogers noted long ago the other volatile months are October, November, December, January, February March, April, May, June, July and August.
United Technology’s today announced the takeover of Rockwell Collins for $23 billion smackers. Rockwell had purchased B/E Aerospace back in April of this year and the deal gives UTX a big presence in commercial aviation, defense, rail and gubment. Untied Tech CEO Greg “Headbanger” Hayes found himself defending the deal after Boeing expressed concern and Airbus worried it would distract UTX from its core business of making engines through the Pratt & Whitney division. The deal is expected to close sometime late next year.
The “fear trade” is on as Interest rates fell due to a flight to safety pushing the yield on the 10 year US treasury to 2.07% which is a level not seen since November of last year. The price of gold also shot higher by 1.2% to $1,340 an ounce. Inflation remains muted at about 1.7%.
With refineries in the gulf region cranking back up again the price of oil gained about 3% to $48.66 a barrel for WTI crude while gasoline prices came back down by 2.7%.