While you were sleeping: Wall St falls

Tuesday 28 March 2017 07:07 AM

While you were sleeping: Wall St falls

By Margreet Dietz

March 28 (BusinessDesk) - Wall Street declined as investors digested the implications of the Trump administration’s decision to cancel a vote on health-care reform because of a lack of support.

US Treasuries gained, sending yields on the 10-year note six basis points lower to 2.35 percent. Gold, another safe-haven asset, also advanced.

"It is less of a panic sell and more of digesting the information and looking beyond the healthcare reform act to the next bit of information, which is going to be tax reform and spending on infrastructure," Mark Watkins, regional investment manager at the Private Client Group at US Bank, told Reuters.

In 1.50pm trading in New York, the Dow Jones Industrial Average declined 0.3 percent. However, the Nasdaq Composite Index added 0.1 percent. In 1.36pm trading, the Standard & Poor’s 500 Index slipped 0.1 percent.

"With the economy continuing to improve, I would look at any pullback as a buying opportunity at this point in time," Watkins noted.

The Dow fell as declines in shares of Chevron and those of Verizon Communications, down 1.6 percent and 1.3 percent respectively, outweighed gains in shares of DuPont and those of Intel, up 1.4 percent and 0.7 percent respectively.

Some analysts say the Trump administration’s failure on the health-care bill suggests they face an even tougher road ahead for tax reform.

“The consensus on [the tax reform] is probably likely to be much more difficult to achieve than on health care, which suggests that a lot of the optimism about the reflation and fiscal stimulus trade may well have to be reassessed as well,” Michael Hewson, chief market analyst at CMC Markets, wrote in a note, Bloomberg reported.

Shares of DuPont posted the largest percentage gain in the Dow in afternoon trading, while Dow Chemical shares rose after the companies received the green light for their mega merger from the European Commission by agreeing to sell assets, notably major parts of DuPont’s global pesticide business.

The approval is conditional in particular on the divestiture of major parts of DuPont's global pesticide business, including its global R&D organisation, the Commission said in a statement.

"Pesticides are products that matter—to farmers, consumers and the environment," European Union Competition Commissioner Margrethe Vestager said in the statement. "We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment."

Dow shares traded 1.3 percent higher as 1.39pm in New York.

In Europe, the Stoxx 600 Index ended the session with a 0.4 percent decline from the previous close. France’s CAC 40 Index slipped less than 0.1 percent, while the UK’s FTSE 100 Index slid 0.6 percent, as did Germany’s DAX Index.

(BusinessDesk)

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