Wall Street opened lower on Tuesday, as investors mulled over disappointing results from a duo of big banks and traders dumped the dollar after a Republican move to shelf plans for healthcare reforms cast further doubts on Trump administration’s ability to push through his other business friendly reforms.
The S&P 500 fell 0.2 per cent to 2,453.72 while the Dow Jones Industrial Average traded 0.3 per cent lower at 21,570.34. However both remain within striking distance of the record highs set last Friday. The Nasdaq Composite meanwhile, was down 3 per cent at 6,294.79, breaking a seven-day winning streak.
Sentiment was not helped by the US dollar, which staged a broad retreat against most major developed and emerging market currencies. The dollar index shed 0.6 per cent to 94.54, its lowest level in nearly 11 months. The greenback’s decline was particularly pronounced against the euro, falling 0.9 per cent to a $1.1578, an 18-month low.
“The collapse of efforts to repeal the Affordable Care Act further reduces the odds fiscal stimulus measured are passed in 2017/early ‘18,” said analysts at Evercore ISI. “The already depressed path of Fed rate hike expectations declined again overnight, dragging the USD lower.”
The decline in US equities came despite the rally in crude and energy stocks. The energy sector was the day’s best performer on the S&P 500, advancing 0.3 per cent in tandem with oil prices after an industry analyst said Saudi Arabia could be weighing further production cuts.
However, that gain was offset by losses in the healthcare and financial sectors. The S&P 500 healthcare index fell 0.5 per cent and financials were down 0.2 per cent after Bank of America missed on lending margin and Goldman Sachs reported a 40 per cent slump in revenues from fixed income, currencies and commodities trading during the second quarter.