Stocks dip over Wash­ing­ton news

In­vestors’ ner­vous­ness re­vealed by VIX in­dex rise and fall; health care com­pa­nies see Mon­day boost.

The Denver Post - - BUSINESS - By Stan Choe

Wor­ries that Wash­ing­ton may not be able to help busi­nesses as much as once thought knocked stock in­dexes down hard early Mon­day, but they clawed back most of their losses and ended the day mixed.

In­vestors have been an­tic­i­pat­ing that Pres­i­dent Don­ald Trump and the Repub­li­can-led Congress will cut taxes, loosen reg­u­la­tions for com­pa­nies and in­sti­tute other cor­po­rate-friendly poli­cies.

In­dexes re­cov­ered most of their early losses thanks to gains in hospi­tal and other health care stocks. Tax cuts, dereg­u­la­tion and other busi­ness-friendly moves could still hap­pen, but even if they don’t, the stock mar­ket has sev­eral pil­lars of sup­port, said John Man­ley, chief eq­uity strate­gist at Wells Fargo Funds Man­age­ment.

“Trump lucked out when he got elected pres­i­dent, be­cause it was just as earn­ings were com­ing out of a two-year slum­ber,” he said. “I think it’s been as much, if not more, about earn­ings as it’s been him” be­hind the 9.4 per­cent rise for the S&P 500 since Elec­tion Day, Man­ley said.

An im­prov­ing econ­omy is trans­lat­ing into big­ger prof­its for busi­nesses, which are set to re­port their first-quar­ter re­sults in the com­ing weeks. The Fed­eral Re­serve, mean­while, is mov­ing very slowly in rais­ing in­ter­est rates and is loath to ap­ply the brakes to the econ­omy too quickly.

“In­vestors have to ac­knowl­edge that a 5 per­cent cor­rec­tion can hap­pen at any time, and the fact that we haven’t had a 1 per­cent down day for so long is ex­tra­or­di­nary,” Man­ley said. The S&P 500 has lost 1 per­cent in a day just once since mid-Oc­to­ber.

In­ter­est rates fell Mon­day. The yield on the 10-year Trea­sury dropped to 2.37 per­cent from 2.41 per­cent Fri­day. Just a cou­ple weeks ago, it was above 2.60 per­cent.

Early Mon­day, the VIX jumped nearly 17 per­cent and was close to its high­est level since mid-Novem­ber. It calmed through the day and was down by the af­ter­noon.

Hospi­tal stocks were among the strong­est per­form­ers. Hos­pi­tals take care of pa­tients whether or not they’re in­sured.

HCA Hold­ings jumped $4.45, or 5.2 per­cent, to $90.49 for the big­gest gain in the S&P 500. Uni­ver­sal Health Ser­vices rose $4.08, or 3.3 per­cent, to $125.97.

Bench­mark U.S. crude fell 24 cents to set­tle at $47.73 per bar­rel. Brent crude, used to price in­ter­na­tional oils, fell 5 cents to $50.57 a bar­rel. Nat­u­ral gas fell 2 cents to $3.05 per 1,000 cu­bic feet, whole­sale gaso­line rose a penny to $1.62 per gal­lon and heat­ing oil was close to flat at $1.50 per gal­lon.

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