USA stocks close lower as investors weigh health care defeat, tax reform
- Author: Zachary Reyes Mar 28, 2017,
Mar 28, 2017, 10:54
At 1100 GMT, Dow Jones Industrial Average futures were down 0.7%, while S&P 500 and Nasdaq futures were 0.8% lower.
The major European markets also moved to the downside on the day.
"There's some disappointment about the administration's failure on health care and what that might mean for the rest of their agenda", Russ Koesterich, a co-portfolio manager of BlackRock's Global Allocation Fund, told the Wall Street Journal. The GOP bill was pulled on Friday when it was clear the GOP didn't have enough votes to pass it.
"Tax legislation done right and done quickly is a big stimulant to earnings and the market", said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
Bank stocks, which had outperformed in the post-election rally on bets of tax cuts and simpler regulations, took a beating on Monday.
The benchmark S&P 500 had fallen as much as 0.9 percent initially on Monday and briefly dropped below its 50-day moving average for the first time since just after the November 8 USA presidential election. The benchmark Shanghai Composite Index edged down 0.08 percent to 3,266.96 points.
The telecoms sector .SPLRCL fell 0.7 percent while financial shares .SPSY dropped 0.5 percent.
The dollar, which had found favor on the possibility of tax cuts and higher infrastructure spending, hit its lowest since November 11, while prices of safe-haven gold shot up to one-month highs.
The S&P 500 was hovering around 2,340 mid-Monday.
Investors will look forward to comments from Chicago Federal Reserve President Charles Evans and his Dallas counterpart, Robert Kaplan, for clues on the timing of the next interest rate hike.
Declining issues outnumbered advancing ones on the NYSE by a 1.00-to-1 ratio; on Nasdaq, a 1.29-to-1 ratio favored advancers.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were 0.2% lower, testing their support at the short-term, 50-day simple moving average.