Stocks plunge on Trumpcare strug­gle

Dow sheds al­most 238 points as fate of bill ap­pears murky.

Austin American-Statesman - - BUSINESS -

U.S. stocks took their big­gest loss in five months Tues­day as a health care bill backed by Pres­i­dent Don­ald Trump ran into trou­ble in Congress, which raised some ques­tions about his agenda of faster eco­nomic growth spurred on by lower taxes and cuts in reg­u­la­tions.

Banks plunged as bond yields con­tin­ued to fall, which will mean lower in­ter­est rates on loans. Trans­porta­tion com­pa­nies in­clud­ing air­lines, rail­roads and rental car com­pa­nies dropped, and so did ma­te­ri­als com­pa­nies like steel and chem­i­cals mak­ers. The dol­lar weak­ened. Small-com­pany stocks, which stand to ben­e­fit the most from Trump’s pol­icy pro­pos­als of lower taxes and looser reg­u­la­tions, fell more than the rest of the mar­ket.

“Pres­i­dent Trump promised that this health care bill would be signed, sealed, de­liv­ered within the first cou­ple of weeks of him tak­ing of­fice,” said Jack Ablin, chief in­vest­ment of­fi­cer for BMO Cap­i­tal Mar­kets. “All this is do­ing is push­ing the rest of the agenda out.”

The Stan­dard & Poor’s 500 in­dex tum­bled 29.45 points, or 1.1 per­cent, to 2,344.02. That was its big­gest drop since Oct. 11. The Dow Jones in­dus­trial av­er­age fell 237.85 points, or 1.1 per­cent, to 20,668.01.

The Nas­daq com­pos­ite sur­ren­dered 107.70 points, or 1.8 per­cent, to 5,793.83. The Russell 2000 in­dex of small-com­pany stocks plunged 37.55 points, or 2.7 per­cent, to 1,346.55. Four-fifths of the stocks on the New York Stock Ex­change fell.

Stocks have fallen for four days in a row, though the pre­vi­ous losses were small. Tues­day’s losses were a re­ver­sal of the pat­terns that have en­dured since Trump was elected in Novem­ber, but over­all stocks are still sharply higher since then.

On Thurs­day, the House of Rep­re­sen­ta­tives is sched­uled to vote on the Repub­li­can-backed Amer­i­can Health Care Act, and de­spite sup­port from the pres­i­dent Tues­day, it’s not clear if the House or the Se­nate will ap­prove the bill. The ad­min­is­tra­tion hopes to get a ma­jor tax re­form pack­age to Congress by Au­gust, and a big in­fra­struc­ture spend­ing pro­posal may fol­low next year.

Banks had their worst day in nine months as bond prices rose. The yield on the 10-year Trea­sury note de­clined to 2.42 per­cent from 2.46 per­cent. Bank of Amer­ica fell $1.42, or 5.8 per­cent, to $23.02. KeyCorp sank $1.18, or 6.5 per­cent, to $16.90, the big­gest loss in the S&P 500. JPMor­gan Chase gave up $2.64, or 2.9 per­cent, to $87.39.

Bench­mark U.S. crude lost 88 cents, or 1.8 per­cent, to $47.34 a bar­rel in New York. Brent crude, used to price in­ter­na­tional oils, closed down 66 cents, or 1.3 per­cent, to $50.96 a bar­rel in Lon­don.

The price of gold jumped $12.50, or 1 per­cent, to $1,246.50 an ounce.

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