Stocks fall after Steven Mnuchin's odd statement fails to calm markets

Stocks opened lower, a day after an unusual statement by Treasury Secretary Steven Mnuchin, who convened a series of calls on Sunday with the CEOs of the country's biggest banks.

Mnuchin said the executives assured him their banks are healthy and have "ample liquidity" to lend to consumers and businesses. "Markets continue to function properly," he said.

"This is the type of announcement that raises the question of whether Treasury sees problems that the rest of the market is missing," Cowen & Co. analyst Jaret Seiberg wrote in a note to clients. "Not only did he consult with the biggest banks, but he is talking to all of the financial regulators on Christmas Eve. We do not see this type of announcement as constructive."

Stocks are on pace for their worst December since the Great Depression. On Friday, the Dow ended its worst week since 2008. The Nasdaq is in a bear market.

But few -- if anyone -- claimed markets weren't working "properly" or that banks were low on cash.

"It raises the question of why Treasury needs to reassure if everything is okay," Seiberg wrote.

Presidents play with fire when they brag about the stock market

The Dow declined around 150 points at the open. The S&P 500 and Nasdaq also fell. Shares in JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), Bank of America (BAC) and Citi (C) all lost ground.

Adding to the shaky start on Monday: The partial shutdown of the federal government will continue at least until Thursday, and possibly into January. Although the closure of some government services isn't expected to hurt the economy, the inability of lawmakers and President Donald Trump to put politics aside to enact a budget is unnerving to investors.

"The confusion and disorder surrounding this week's spending debate suggest fiscal deadlines in 2019 — including the debt limit deadline, which we expect to fall between August to October — could be more disruptive than they have been since the 2011-2013 period," Goldman Sachs economists wrote in a research note.

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