(CBS) — U.S. financial markets slipped in early trading Wednesday as investors sought to gauge the impact of the legal and political issues surrounding President Trump’s administration.
The Dow dropped 14 points, or less than 1 percent, to 25,808.50, while the S&P 500 declined 2 points to 2,861.READ MORE: Chicago Police Issue Alert Of Armed Robberies In Lincoln Park And Lake View
The decline comes as the stock market.
Unless the stock market drops considerably in trading today, the bull market that started in March 2009 will have lasted nine years, five months and 13 days. The long rally has added trillions of dollars to household wealth and boosted the economy.
Even so, investors are wary about the legal drama surrounding President Trump after his former campaign chairman, Paul Manafort,of bank fraud and Mr. Trump’s longtime fixer, Michael Cohen, , including campaign finance violations.
Analysts expect mounting questions about Mr. Trump’s future, which could distract from the administration’s ability to govern, according to Eurasia Group.
“The selloff today … is a flare which could morph into a fire should revelations today meaningfully shake confidence in the president’s ability to govern and campaign,” Eurasia Group wrote in a research note.
It added, “In this instance, the amount of time it takes to resolve legal questions bears directly on the magnitude and duration of risks the president poses to markets, businesses and the Washington balance of power.”
The dollar is also feeling the impact of the Trump administration’s legal problems, according to TD Securities.READ MORE: Chicago Weather: Heavy Rain, Possible Flood Watch
The U.S. dollar “continues to slide ahead of the Fed minutes and amidst a worsening U.S. political backdrop,” its analysts noted.
To be sure, the markets often aren’t a good gauge of political risk, given that investors look first to other measures, such as economic growth and corporate earnings.
Record bull run
The most recent surge has been fueled by strong corporate profits, tax cuts and higher consumer spending.
At the same time, corporations are boosting spending to buy back their own shares, which Trim Tabs Investment Research said will “smash previous records” in 2018.
This year, U.S. companies have bought back $4.8 billion of their own shares each day, compared with an earlier record of $3.2 billion per day in 2007.
Share buybacks help support stock prices by reducing the number of outstanding shares traded in the market, which increases per-share earnings and the ownership stake of current shareholders.
Second-quarter corporate earnings have generally been strong, with FactSet noting earlier this month that almost 8 out of 10 companies have reported earnings that exceeded analyst expectations.
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