Impeachment drama whipsaws stocks, dollar rises

The latest impeachment drama in Washington whipsawed U.S. stocks, adding another risk to markets already on edge over trade and slowing global growth. The dollar rallied.

The S&P 500 bounced to session highs after President Donald Trump said a deal with China could happen “sooner than you think,” speaking to reporters amid the swirl of impeachment that has consumed Washington. Equities fell to lows earlier when the White House released a rough transcript of Trump’s call with Ukraine that is at the center of the controversy. Stocks had the biggest loss in a month Tuesday after the House signaled its intention to open a formal inquiry.

“You can’t trade this stuff right now, it’s impossible,” Michael Purves, chief executive officer at Tallbacken Capital Advisors LLC, said on Bloomberg TV Wednesday. “There’s so many different scenarios, you almost have to ignore it and keep investing the way you would.”
In company news, Philip Morris and Altria both rose after ending merger talks, while Marathon surged on activist intervention. Nike Inc. rose to a record after strong results.

Markets have seemed to gyrate on the twists and turns of the protectionist battle between the two largest economies, with this year’s epic bond rally recovering from a pullback and U.S. stocks lingering within sight of a record high. The sudden escalation of political risk in Washington comes as economic signals deteriorate globally, adding a fresh complication for investors trying to decide whether central banks will be able to shore up growth.

In Europe, the mood was more dour. The Stoxx Europe 600 Index headed for its largest drop in six weeks amid rising concern that growth is flagging. U.K. shares fell as parliament reconvened amid Brexit turmoil. Asian benchmarks retreated, with losses of more than 1% in Hong Kong, South Korea, mainland China and India. Crude futures declined after Saudi Aramco said it was ahead of schedule in restoring output.