NEW YORK (BLOOMBERG, REUTERS) - US stocks opened lower on Tuesday (Nov 8), with Wall Street retracing some of its biggest one-day gain in eight months, as American voters headed to the polls to choose a new president.
The Dow Jones industrial average fell about 20 points shortly after the open, with Goldman Sachs contributing the most losses. The S&P 500 slipped about 0.3 per cent after opening just below the flatline.
Investor appetite for riskier assets appeared to be low as Wall Street is also coming off its best day in more than eight months on Monday after the FBI said it would not press criminal charges against Clinton over her use of a private email server.
"It's not a surprise we're pulling back after the huge move yesterday," said Matt Maley, an equity strategist at Miller Tabak & Co in New York. "A lot of people are just going to sit on their hands. The people who covered shorts and went long yesterday are probably wanting to take a few profits today. Even if becomes more and more evident that Hillary Clinton is going to win, the upside is going to be a little limited because of the move yesterday."
Clinton has a 90 per cent chance of defeating Republican nominee Donald Trump, according to the final Reuters/Ipsos States of the Nation poll released on Monday. The former secretary of state was on track to win 303 votes in the Electoral College to Trump's 235, clearing the 270 needed for victory.
The iShares MSCI Mexico Capped ETF, known of late as the "Trump ETF", was flat, after notching its best day in more than five years on Monday. The ETF is viewed as a barometer of Trump's chances of winning the election since his policies are considered negative for Mexico.
"Today is going to be a waiting game and likely the calm before the storm tomorrow, which can go either way depending on the outcome," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey. The CBOE Volatility index, dubbed Wall Street's "fear gauge", was up 3.4 per cent, after having notched its biggest one-day drop since late June on Monday.
Speculation on Clinton's chances also helped bolster odds on a Federal Reserve interest-rate increase next month. Data compiled by Bloomberg based on fed funds futures trading show an 82 per cent probability of higher borrowing costs by year end, up from 76 per cent on Friday.