Home » NEWS » Banking & Finance » Stocks tank as health care bill woes challenge Trump agenda

Stocks tank as health care bill woes challenge Trump agenda

U.S. stocks are falling as the struggling Republican health care bill again dominates investors’ attention. House Republicans say the proposal doesn’t have enough support to pass in a vote this afternoon. That’s casting some doubt on President Donald Trump’s business-friendly agenda and stocks are on track for their biggest weekly loss since the presidential election.

KEEPING SCORE: The Standard & Poor’s 500 index dropped 10 points, or 0.4 percent, to 2,339 as of 3:15 p.m. Eastern time. The Dow Jones industrial average lost 122 points, or 0.6 percent, to 20,535. It rose as much as 61 points early on. The Nasdaq composite dipped 8 points, or 0.4 percent, to 5,809. The Russell 2000 index of smaller-company stocks fell 4 points, or 0.3 per cent, to 1,349.

The VIX, known as Wall Street’s “fear gauge,” is up for the sixth day in a row and is at its highest level this year, although it’s not high by historic standards. Some of the companies that have done the best since Trump’s election, including banks and industrial and materials companies, are falling.

HEALTH BILL HOLDUP: Hospital operators like HCA Holdings and Universal Health Systems rose, and so did insurers that do a lot of business with Medicaid, like Centene and Molina Healthcare. When the act was introduced, those stocks traded lower because investors were concerned hospitals would have to take in more patients who lack insurance and that insurers would get less money from Medicaid. The largest national health insurers are down Friday.

The legislation would provide tax credits for people buying their own insurance and would scale back the government’s role in helping people afford coverage. It would likely leave more Americans uninsured and would make big changes to Medicaid, a joint federal-state health program for low-income Americans.

IDLING: While investors weren’t panicking about the state of Trump’s agenda, there were some signs of concern that his proposals of tax cuts, infrastructure spending, and regulatory cuts will take longer. Those are aspects of Trump’s proposed agenda Wall Street is excited about.

Basic materials makers fell the most. Construction materials company Vulcan Materials sank $3.56, or 3.1 percent, to $111.83. Martin Marietta Materials, which sells granite, limestone, sand and gravel, lost $6.39, or 3 percent, to $207.10. Steel maker Nucor declined $1.76, or 2.9 percent, to $59.50.

Construction and machinery companies also stumbled. Engine maker Cummins shed $1.85, or 1.2 percent, or $1.2 percent, to $150.37 and truck leasing company Ryder System sank 88 cents, or 1.2 percent, to $71.96.

THE QUOTE: Michael Scanlon, a portfolio manager for Manulife Asset Management, said investors will be glad if the administration moves on to other issues.

“You’re going to see a very quick pivot to corporate tax reform and that’s regardless of whether this passes or fails,” he said. A corporate tax cut could give stocks a large boost by increasing profits, and it might also raise tax revenues. Scanlon said it’s important that the administration and Congress actually reform taxes, however.

“Something needs to be done with a permanent solution, not just one of these holiday things,” he said, because “the goal is to be a stimulus for domestic investment.”

MAKING A SPLASH: SeaWorld Entertainment jumped after a big investment from China. SeaWorld said real estate holding company Zhonghong Zhuoye Group bought a 21 percent stake from Blackstone Group. It said the Chinese firm paid $23 a share, and an executive will join SeaWorld’s board. The stock has struggled in recent years because of controversy over the condition of SeaWorld’s killer whales, which hurt attendance. The stock gained 89 cents, or 5.1 percent, to $18.20.

FULL STOP: Video game retailer GameStop disclosed weaker-than-expected revenue as consumers cut back on shopping while they waited for companies to introduce the next generation of game systems. GameStop’s forecasts for this year fell far short of analyst forecasts. The stock dropped $3.20, or 13.4 percent, to $20.76.

BONDS: Bond prices rose slightly. The yield on the 10-year Treasury note fell to 2.40 percent from 2.42 percent.

ENERGY: U.S. crude oil futures rose 27 cents to $47.97 a barrel in New York. Brent crude, used to price international oils, added 24 cents to $50.80 a barrel in London.

OTHER ENERGY TRADING: Wholesale gasoline gained 2 cents to $1.60 a gallon. Heating oil rose 1 cent to $1.50 a gallon. Natural gas added 3 cents to $3.08 per 1,000 cubic feet.

CURRENCIES: The dollar inched down to 110.80 yen from 111.07 yen. The euro edged up to $1.0808 from $1.0786.

METALS: Gold rose $1.30 to $1,248.50 an ounce. Silver jumped 16 cents to $17.75 an ounce. Copper lost 1 cent to $2.63 a pound.

OVERSEAS: In Germany, the DAX added 0.2 percent and the French CAC 40 dropped 0.2 percent and Britain’s FTSE 100 index dipped 0.1 percent. Japan’s benchmark Nikkei 225 index rose 0.9 percent following recent losses. The Kospi of South Korea shed 0.2 percent while Hong Kong’s Hang Seng reversed earlier losses to finish 0.1 percent higher.

About Associated Press

One comment

Leave a Reply

Your email address will not be published. Required fields are marked *

*