Healthcare Has the Dow Jones Industrial Average Nervous

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On Thursday, a rally was halted in its tracks when Republicans failed to present a healthcare replacement for “The Affordable Care Act.”

However, President Donald Trump appeared optimistic that the “American Health Care Act” will be brought to a vote with a high chance of passing. However, the extreme sides of the GOP will have to agree to disagree on many provisions, dragging out negotiations through the night. Many analysts are of the opinion that agreement will be hammered out since the administration’s other policy changes, like tax cuts, fiscal stimulus and deregulation, are being held up by this healthcare legislation.

After gains in the morning, the Dow Jones Industrial Average fell less than 0.1%, while the S&P 500 and the Nasdaq fell 0.1%. The Russell 2000 retained a gain of 0.6%.

Energy stocks fell 0.4% following the lead of crude oil (May) which lost 0.7% at $47.70 per barrel.

Healthcare stocks in the S&P 500 continued to plunge, falling 0.4%. UnitedHealth Group Inc (NYSE:UNH) lost 1%.

At the close, the Dow Jones Industrial Average fell 5 points to 20,657, the S&P 500 fell 2, closing at 2,346, the Nasdaq fell 4 points at 5,818, and the Russell 2000 gained 8 points at 1,353. The NYSE’s primary exchange traded 805 million shares with total volume of 3.2 billion shares. The Nasdaq crossed 1.7 billion shares. On the Big Board, advancers outpaced decliners by 1.9-to-1, and on the Nasdaq, advancers led by 1.8-to-1. Blocks on the NYSE fell to 6,190 from 6,935 on Wednesday.

 
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Healthcare Has the Dow Jones Industrial Average Nervous

This 3-minute bar chart of the Dow shows the impact of a failure to bring the American Health Care Act to a vote. Just after noon, with the Dow Jones at its intraday high, the GOP said that they could not get enough votes for passage and would negotiate changes to the bill that many thought a “done deal.”

Conclusion: The replacement healthcare bill was to go to a vote in the House of Representatives yesterday. Jeff Saut, of Raymond James, called it “D-Day” since a failure to pass the bill would be interpreted as a defeat for the president. Additionally it would “send a clear signal that the rest of Trump’s agenda — taxes, the budget, infrastructure, etc. — is in trouble.”

Well, while that is all true, at the time of this writing, major opponents of the original bill are saying that they are within a smidgeon of agreement.

Today’s market and the intermediate-term future of the market depend on their passing the bill, even if it runs into resistance in the Senate. My hunch is that with so much at stake, traders would be smart to take the long side of interest-bearing (banks) and healthcare stocks for a quick trade.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/03/dow-jones-industrial-average-healthcare/.

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