Stock rally sputters after vote on healthcare bill is delayed
U.S. stock indexes gave up an early rally and ended mostly lower Thursday after Republicans delayed a vote on their healthcare bill and left investors concerned about delays for President Trump’s business-friendly agenda.
The Dow Jones industrial average was up as much as 96 points just before 1 p.m. Eastern Time, but doubts cast a shadow over the market as hard-line conservatives said they didn’t support the bill. Healthcare stocks turned lower.
Alphabet, Google’s parent company, fell as more advertisers stepped back from YouTube. Smaller firms did better than the rest of the market and more stocks rose than fell, signaling investors are still confident in the U.S. economy.
Near the close of trading, House Republican leadership postponed a vote on the American Health Care Act because of a lack of support. Conservatives and more moderate Republicans had opposing concerns about the bill, which is widely disliked by House Democrats.
Jamie Cox, managing partner for Harris Financial Group, said investors are worried about how the Republican-controlled Congress and White House will come together on issues including tax reform, a debt ceiling increase, and a boost in infrastructure spending.
“If the Republicans are having such a difficult time making changes to something they universally agree upon, how on Earth are they going to agree on the more complicated tax cut that is coming through later in the year?” Cox said. Still, the losses were small, suggesting investors think some of the proposals will be delayed rather than abandoned.
Bond prices edged down. The yield on the 10-year Treasury note, which has skidded over the last few days, rose to 2.42% from 2.40%. That gave banks and other financial firms a lift.
The S&P 500 banking inDrug dex had plunged 5% over the previous four days as bond yields and interest rates decreased. Banks turned higher Thursday. SunTrust Banks rose 1.2% to $54.85 and Huntington Bancshares rose 1.9% to $13.02.
Alphabet fell 1.2% to $839.65 as a YouTube advertising boycott spread. Companies including Johnson & Johnson, AT&T and Verizon have suspended their YouTube ad campaigns in the last week because their ads were appearing alongside offensive videos. Technology firms lagged behind the rest of the market.
Companies that run Medicaid programs, such as Molina Healthcare and Centene, stumbled, and health insurance companies such as UnitedHealth and Humana took small losses. companies also fell. Hospital operators rose, as did medical device makers.
Cox, of Harris Financial, said stocks probably won’t fall much further if the healthcare bill ultimately fails because investors will focus on other items on Trump’s agenda.
PVH, which owns Calvin Klein and Tommy Hilfiger, jumped 8.5% to $98.55 after its fourth-quarter profit and sales beat analyst estimates.
Discount retailer Five Below climbed 10.8% to $42.25 after it surpassed Wall Street projections in its fourth quarter. Retailers have struggled in recent months, but consumer-focused companies did better than the broader market Thursday. Nike, which plunged 7% a day earlier, rose 2.7% to $55.37.
U.S. crude oil fell 34 cents to $47.70 a barrel. Brent crude slipped 8 cents to $50.56 a barrel. That pulled energy companies lower. Wholesale gasoline fell 1 cent to $1.59 a gallon. Heating oil fell 1 cent to $1.49 a gallon. Natural gas rose 4 cents to $3.05 per 1,000 cubic feet.
Gold fell $2.50 to $1,247.20 an ounce. Silver rose 2 cents to $17.59 an ounce. Copper rose 1 cent to $2.64 a pound.
The dollar rose to 111.07 yen from 110.92 yen. The euro fell to $1.0786 from $1.0798.