Overnight Finance: Stocks fall hard | Trump sending delegation to China for trade talks | SEC fines Yahoo $35M over breach | Dodd-Frank rollback dominates banking conference

Overnight Finance: Stocks fall hard | Trump sending delegation to China for trade talks | SEC fines Yahoo $35M over breach | Dodd-Frank rollback dominates banking conference
© Greg Nash

Happy Tuesday and welcome back to Overnight Finance, a very honorable newsletter. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

 

THE BIG DEAL: U.S. stocks took steep losses Tuesday despite solid corporate earnings reports as rising interest rates spurred uncertainty among investors.

The Dow Jones Industrial Average closed 424 points lower, a 1.74 percent drop, after falling more than 600 points at midday. The Nasdaq fell 1.7 percent on the day, while the S&P 500 sunk 1.34 percent.

The yield on 10-year Treasury bonds rose to 3 percent for the first time since 2014 on Tuesday, a threshold that investors generally associate with a fading stock market.

Sectors posting the biggest losses included tech (2 percent), materials (2.69 percent) and industrial (2.82 percent) stocks.

Tuesday's losses reflect a growing belief among investors that the forces behind last year's rampant stock gains would continue to fade. The U.S. economy is still on track for a strong 2018 with record low unemployment and steady growth, but rising interest rates and inflation could spur a slowdown in equities investment. I've got more here.

 

ON TAP TOMORROW

 

LEADING THE DAY

Trump sending delegation to China for trade talks: President TrumpDonald John TrumpLondon terror suspect’s children told authorities he complained about Trump: inquiry The Memo: Tide turns on Kavanaugh Trump to nominate retiring lawmaker as head of trade agency MORE on Tuesday said he will send top administration officials to China next week to work on carving out a deal that would resolve long-standing trade disputes.

Treasury Secretary Steven MnuchinSteven Terner MnuchinTrump announces tariffs on 0B in Chinese goods Trump: China tariff announcement to come Monday afternoon Trump could hit China with tariffs of 0 billion as soon as Monday MORE and U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerMcConnell urges GOP senators to call Trump about tariffs Companies brace for trade war MORE are expected to travel to China "in a few days" to talk trade with Beijing, Trump said during a meeting with French President Emmanuel Macron.

"I think China is very serious, we're very serious," Trump said at the White House.

"And we have no choice but to be very serious," he said. Here's more from The Hill's Vicki Needham on what they hope to accomplish.

 

SEC fines Yahoo $35 million over 2014 email breach: Yahoo has agreed to pay a $35 million penalty after failing to properly notify customers and investors that hackers had compromised hundreds of millions of user accounts, the Securities and Exchange Commission (SEC) announced Tuesday.

Yahoo, which was rebranded after being purchased by Verizon last year, first learned about the cyber intrusion in December 2014, but did not alert the public until December 2016, according to the SEC's order. 

While Yahoo agreed to pay the charges without admitting or denying wrongdoing, this settlement marks the first time the SEC has pursued a company for failing to properly disclose a cyber breach. The Hill's Olivia Beavers tells us more here.

 

FINANCE IN FOCUS

Dodd-Frank rollback bill dominates talk at banking conference: The American Bankers Association (ABA) kicked off their annual government relations summit this week, and featured speeches from Acting CFPB Chief Mick MulvaneyJohn (Mick) Michael MulvaneyOn The Money: Midterms to shake up House finance panel | Chamber chief says US not in trade war | Mulvaney moving CFPB unit out of DC | Conservatives frustrated over big spending bills Warren suggests Mulvaney broke law by speaking to GOP donors Mulvaney plans to move some consumer bureau staff to new Atlanta office MORE, Sen. Mark WarnerMark Robert WarnerRussia docs order sets Trump on collision with intel community Hillicon Valley: North Korean IT firm hit with sanctions | Zuckerberg says Facebook better prepared for midterms | Big win for privacy advocates in Europe | Bezos launches B fund to help children, homeless Bipartisan trio asks US intelligence to investigate ‘deepfakes’ MORE (D-Va.) Reps. Blaine LuetkemeyerWayne (Blaine) Blaine LuetkemeyerOn The Money: Midterms to shake up House finance panel | Chamber chief says US not in trade war | Mulvaney moving CFPB unit out of DC | Conservatives frustrated over big spending bills Midterms to shake up top posts on House finance panel Record numbers of women nominated for governor, Congress MORE (R-Mo.) and Patrick McHenryPatrick Timothy McHenryOn The Money: Midterms to shake up House finance panel | Chamber chief says US not in trade war | Mulvaney moving CFPB unit out of DC | Conservatives frustrated over big spending bills Midterms to shake up top posts on House finance panel Kavanaugh hires attorney amid sexual assault allegations: report MORE (R-N.C.).

While all of the featured speakers backed rolling back Dodd-Frank in some form, they exposed the deep divides between Senate moderates pushing their bipartisan plan to loosen the law and House Republicans seeking to add their own measures to the bill.

Speaker Paul RyanPaul Davis RyanElection Countdown: Trump confident about midterms in Hill.TV interview | Kavanaugh controversy tests candidates | Sanders, Warren ponder if both can run | Super PACs spending big | Two states open general election voting Friday | Latest Senate polls On The Money: Midterms to shake up House finance panel | Chamber chief says US not in trade war | Mulvaney moving CFPB unit out of DC | Conservatives frustrated over big spending bills Nancy Pelosi: Will she remain the ‘Face of the Franchise’? MORE (R-Wis.) has vowed to freeze the Senate bill until senators agree to negotiate changes.

ABA has called on the House to pass the Senate bill and the trade group's top officials spent the morning rallying bankers from across the US to push their representatives to support the measure.

"I cannot tell you how difficult it is to get anything through the Senate, let alone with 67 votes," said James Ballentine, ABA executive vice president of congressional relations. "The appetite to get some more done is not there in the Senate at this time."

"Our view is let's try to get as much done through all the means as possible," added ABA president Rob Nichols.

Sen. Mark Warner (D-Va.), a co-sponsor of the Senate Dodd-Frank rollback, said it was essential for the House to pass the bill without delay, citing the threat of Trump thrusting Congress into chaos by firing Deputy Attorney General Rod RosensteinRod Jay RosensteinTrump attack on Sessions may point to his departure Hill.TV INTERVIEW EXCLUSIVE: Trump eviscerates Sessions: ‘I don’t have an attorney general’ Dem lawmakers slam Trump’s declassification of Russia documents as ‘brazen abuse of power’ MORE or special counsel Robert MuellerRobert Swan MuellerSasse: US should applaud choice of Mueller to lead Russia probe MORE.

"We know we could be in for some choppy times," said Warner, the ranking Democrat on the Senate Intelligence Committee, which is probing potential connections between Trump and Russia. "Please make sure we get this legislation to the president's desk."

Warner also insisted that there is no way to amend the Senate bill without costing the support of its Democratic sponsors, dooming the measure for failure. He's previously said that Democrats backing the bill vowed to vote against it as a bloc it if it comes back to the Senate with changes.

"We've stretched this bill as far it could go," Warner said. "Urge [House Financial Services Committee Chairman JebHensarling and the speaker to pass this legislation."

 

House Republicans on the Financial Services panel brushed back at Warner and those pushing the lower chamber to clear the Senate bill without a chance to amend it.

"If we don't push back on this bill as the House, every single bill for the next seven, eight months will be a jam job," said Luetkemeyer. "That means the whole system is going to rely on the Senate. That can't happen."

"There's a lot of reasons why this has an opportunity to pass," he added. "We don't want to kill the bill. We want to make it better."

McHenry told reporters after his speech that the Senate deal "would have been called a technical corrections bill" three decades ago, when Congress operated in a more bipartisan fashion.

"Eight years after Dodd-Frank, it is heralded as a fantastic breakthrough moment because the Senate has not been able process anything meaningful since Dodd-Frank on the Senate Banking Committee jurisdiction," McHenry said. "And that's unfortunate."

 

GOOD TO KNOW 

  • Senators sparred over the new tax law's deduction for pass-through businesses and its impact on the national debt in a Finance Committee hearing on the new measure Tuesday.
  • The acting director of the Consumer Financial Protection Bureau on Tuesday said that he might remove a database of complaints to the agency from public view.
    Trump has tapped Jeffrey Gerrish to be acting president of the Export-Import Bank as business leaders are enormously frustrated by Congress's inaction, asserting that lucrative overseas deals are slipping away from American companies.
  • The Treasury Department released a report Tuesday promoting its efforts to scale back regulations, a key priority of the Trump administration.
  • A bipartisan group of lawmakers on the House Ways and Means Committee is asking the IRS questions about the technical difficulties that led the agency to extend the tax-filing deadline. 
  • Voters' concerns over rising deficits and the national debt grew in April as the GOP tax law and $1.3 trillion spending bill went into effect, according to a monthly poll from the Peter G. Peterson Foundation, which advocates for lowering the debt.

 

ODDS AND ENDS

  • The CFPB has requested that the Associated Press change its entry in the AP Stylebook to refer to the agency as the Bureau of Consumer Financial Protection amid a push to rebrand the agency.