US shares, dollar pare losses

European shares fell before Republicans pulled their bill to overhaul the US health care system

US shares pared losses to end slightly lower on Friday after Republicans pulled their bill to overhaul the US health care system due to a shortage of votes, dealing a blow to US President Donald Trump, while European shares fell ahead of the decision.

The benchmark US S&P500 stock index ended a touch lower after falling as much as 0.4 per cent earlier, before a House Republican leadership aide said the bill had been pulled by US House Republican leadership. Traders were on tenterhooks during most of the session as they awaited the outcome of the vote.

European stocks slipped as caution prevailed ahead of the decision, with the FTSEurofirst 300 index of top European shares falling about 0.5 per cent for the week.

But many analysts and investors have seen a failure of the bill as a catalyst to bring forward action on pro-growth policies such as tax reform, deregulation and infrastructure spending.

“The market is taking it as a positive that they are not pursuing something that looked like it was hitting a brick wall, and that means it’s more likely they can move on to other issues the market would like such as deregulation and lower taxes,” said Margaret Patel, senior portfolio manager at Wells Fargo Asset Management in Boston.

MSCI’s all-country world equity index was last up 0.24 point, or 0.05 per cent, at 447.72.

The Dow Jones Industrial Average closed down 59.86 points, or 0.29 per cent, at 20,596.72. The S&P 500 closed down 1.98 points, or 0.08 per cent, at 2,343.98. The Nasdaq Composite ended 11.05 points higher, or 0.19 per cent, at 5,828.74.

Europe’s broad FTSEurofirst 300 index closed down 0.16 per cent at 1,484.54.

The US dollar index, which measures the greenback against a basket of six major rivals, hit a seven-week low of 99.527 before the health care decision but pared losses after the announcement and was last marginally higher at 99.765.

“If this stronger dollar has legs, it depends on the next step,” said Paresh Upadhyaya, director of currency strategy at Pioneer Investments in Boston. “If there is a pivot to taxes from health care, the market has to see the plan.”

- Reuters