US stocks slump as market digests Trump health setback

NEW YORK: Wall Street stocks fell early Monday in the first full session since Republican leaders withdrew a US health care reform bill, dealing a major setback to President Donald Trump.

About 10 minutes into trading, US stocks were solidly lower, a more decisive reaction to the surprise outcome in Congress compared with Friday, when the market finished the session mixed in the brief period of trading after the bill died.

The Dow Jones Industrial Average was at 20,427.39, down 0.8 percent.

The broad-based S&P 500 dropped 0.9 percent to 2,324.07, as did the tech-rich Nasdaq Composite Index which was down to 5,774.65.

Analysts said the demise of the health care replacement, Trump's first major legislative effort, raised questions about the new president's ability to advance the rest of his agenda.

"The prospects for tax reform, regulatory change and fiscal stimulus have helped fuel the post-election market rally, but last week's failed attempt at healthcare reform has put a dent in confidence around the administration's ability to effectively accomplish those initiatives," according to Briefing.com.

Hospital stocks HCA and Universal Health Services rose 4.5 percent and 3.2 percent, respectively, as the chance of a major overhaul threatening federal programs key to their businesses subsided.

But large banks fell again, with JPMorgan Chase losing 1.8 percent and Goldman Sachs 2.7 percent. The sector was one of the biggest beneficiaries of post-election investor bullishness, on the hopes of tax cuts and regulatory reform.

Dow Chemical shed 0.6 percent and DuPont 0.5 percent as European Union antitrust authorities approved the $130 billion merger of the two companies, provided DuPont sells "major parts" of its global pesticides business.

Copyright AFP (Agence France-Press), 2017