U.S. Stocks Pare Losses as Health-Care Shares Gain, Bonds Rally

BNP's Saywell Says Trump Reflation Is Not Over

U.S. stocks fell, dropping for a 7th day in 8, after President Trump and House Republicans failed to pass his health-care bill, undermining optimism he can enact his promised growth policies.

  • S&P 500 index ends 0.1% lower at 2,342 at 4pm after paring early losses of as much as 0.9%
    • Loss last week was the most since the week before the election
  • Dow Industrials down 0.2% to 20,545
  • Financial and industrial shares down, losing at least 0.4% after paring steep declines in early trading
    • Morgan Stanley, Capital One and Charles Schwab among worst performers, down at least 1.5%
  • Utility and real-estate shares reversed early gains to end the day as the biggest underperformers; 10-year Treasury yield fell 4bps to 2.37%
  • Crude oil down 0.4% amid concern that global stockpiles are swollen, even as producers pledged to consider extending a deal to reduce output; energy stocks down 0.4%
  • With the drama over the Republican effort to repeal and replace former President Barack Obama’s Affordable Care Act over, Trump said he’s ready to move on to tax reform
    • House Speaker Paul Ryan said the failure of the health-care bill has made tax overhaul more difficult
  • “The obstacles to tax reform are at least as great as those that blocked the health-care bill,” Tan Kai Xian, an analyst at consultancy GaveKal Research, wrote in a note; “it is now abundantly clear that fiscal and regulatory reforms are going to take a lot longer to accomplish than many investors previously hoped”
  • VIX fell to 12.50 after earlier climbing to the highest since November
  • Volume 8.4% lower than YTD average
  • ECONOMY:
    • Chicago Fed President Charles Evans said in interview with Bloomberg News that two rate hikes may be right for U.S. economy
    • Dallas Fed March manufacturing survey at 16.9 vs 24.5 in the prior month; estimate 22
  • EARNINGS (S&P 500):
    • Pre-market Tuesday: Carnival (CCL)
  • Stoxx Europe 600 Index down 0.4% with a gauge for the basic resources sector dropping 3.3%
    • Mining stocks had been been among the biggest beneficiaries of the Trump rally that began in November

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