MARKET SNAPSHOT: Stocks Tumble On News Report Flynn Will Testify About Trump

Dow drops more than 200 points, erodes weekly gains

U.S. stock-market indexes turned decisively lower in Friday trade after former national security adviser Michael Flynn pleaded guilty to lying to the Federal Bureau of Investigation ( and a news report said that he has promised full cooperation with the special counsel's Russia investigation.

Friday's losses eroded what would have been solid weekly gains for the S&P 500 and Dow industrials, but the benchmarks are still on track to end the week higher.

The tech-heavy Nasdaq Composite is set to end the week solidly lower, however after a big selloff among the largest, highflying stocks.

Where are stocks trading?

The blue-chip benchmark Dow industrials dropped 243 points, or 1%, to 24,026, still on track for a 2% gain over the week.

Read: Where to stash your money when this bull market makes you sweat (

The S&P 500 fell 28 points, or 1.1%, to 2,618. The benchmark index is on track to end the week 0.6% higher.

The Nasdaq Composite Index declined 100 points, or 1.5%, to 6,768 and looked set for a 1.8% weekly loss.

The Nasdaq index on Wednesday suffered its biggest drop in more than three months, as highflying tech stocks slumped amid portfolio rebalancing among traders.

What's driving the market?

Investors reacted to the news that the former national-security adviser Michael Flynn pleaded guilty Friday to lying to the FBI, becoming the second member of President Trump's campaign to reach a deal with the special counsel investigating Russia's alleged interference in the U.S. election.

ABC News ( reported that Flynn had promised "full cooperation" in the special counsel's investigation and is prepared to testify that Trump directed him to make contact with the Russians, initially as a way to work together to fight ISIS in Syria.

Some analysts suggested that this news would delay the vote in the Senate to pass the tax cut bill aimed at lowering corporate tax rates. The final vote on the bill was expected late Thursday but was pushed to Friday because a number of issues still remained unresolved (

Read:Here's what's next for the Senate's tax bill (

Among key concerns is how to finance the tax cuts. On Thursday, the Joint Committee on Taxation said the Senate bill would generate more than $400 billion in revenue over 10 years through economic growth, but that's not nearly enough to compensate for the measure's $1.4 trillion cost.

What are strategists saying?

"Mike Flynn testifying against the president was one thing that the market was not pricing in whatsoever, so it's not surprising to see such a sharp knee-jerk reaction," Mike Antonelli, equity sales trader at Robert W. Baird & Co.

"What this also shows is how everyone in the market was positioned long--nobody was short. And news like this can be seen as derailing the tax cuts bill, which is what most investors want," Antonelli said.

What's on the economic docket?

The Markit manufacturing purchasing managers index for November fell to 53.9 from 54.6 in October. The ISM manufacturing reading ( to 58.2% in November from 58.7% in October.

What stocks are moving?

Mylan NV(MYL) shares jumped 3% after a CNBC report on Thursday that Inc. (AMZN) was holding preliminary talks with generic drugmakers ( Mylan and Novartis AG(NOVN.EB) (NOVN.EB) unit Sandoz--as it contemplates entering the pharmacy business.

Energy shares also attracted investors. Halliburton Co Inc shares rose 3%, while Schlumberger NV rose 2.2%.

Some heavily-weighted tech stocks continued to weaken. Shares of Apple Inc. (AAPL) fell 1%, while NVIDIA Copr (NVDA) slid 2/3%, and Inc.(AMZN) dropped 1.2%.

Shares of General Motors Co. (GM) fell 1.5% after the car maker reported monthly sales in the U.S. fell by 2.9%, with declines in all brands. Ford Motors shares fell 0.8%.

Shares of Blue Apron Holdings Inc.(APRN) climbed 6.4% after the struggling meal-kit maker late Thursday installed Chief Financial Officer Brad Dickerson as Chief Executive (, pushing out co-founder Matthew Salzberg.

Read:'It made us look bad': Pharma CEOs clash over Allergan patent move (

What are other markets doing?

Asian markets closed mixed (, while European stocks were firmly lower in the early going.

Oil prices advanced (, building on gains seen after major oil producers, as expected, on Thursday hammered out an agreement to extend ongoing production curbs through 2018. Crude for January traded 2% higher at $58.64 a barrel.

Gold prices rose sharply, trading 1% higher at $1,288.50 an ounce. The ICE Dollar index dropped after Flynn news, trading 0.4% lower at 92.696. The yield on the 10-year Treasury bond fell 7 basis points to 2.34%.

(END) Dow Jones Newswires

December 01, 2017 12:08 ET (17:08 GMT)