Wall Street slips at open on tepid earnings, policy gridlock

A street sign is seen near the New York Stock Exchange.
A street sign is seen near the New York Stock Exchange.PHOTO: AFP

NEW YORK (REUTERS) -US stocks opened lower on Tuesday, weighed down by earnings reports from some big names and concerns over President Donald Trump's ability to push through his pro-growth policies, following a setback to the healthcare bill.

Shares of Bank of America slipped 0.8 per cent, while Goldman Sachs was down 0.9 per cent after reporting quarterly results. Last week, shares of JPMorgan, Wells Fargo and Citigroup had taken a beating after their quarterly results and forecasts failed to excite investors.

Harley-Davidson slumped 9.6 per cent after the motorcycle maker cut its 2017 shipments forecast. The healthcare sector will be under scrutiny after the Republican healthcare bill to replace Obamacare sank in the Senate, with news that two Republican senators would not support the latest version of the bill. The healthcare bill failure spelled uncertainty for President Donald Trump's agenda of tax reform and an infrastructure overhaul, leaving the president without any major legislative accomplishments six months into his tenure.

News on the healthcare bill sent the US dollar to a 10-month low against a basket of major currencies. "Investor sentiment is pessimistic this morning," said Naeem Aslam, chief market analyst at Think Markets UK. "The fiasco of the healthcare bill means that the tax reforms or the so called infrastructure spending plan are in jeopardy."

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UnitedHealth Group fell 0.2 percent, while Johnson and Johnson fell 0.4 per cent.

At 9:34 a.m. ET (9:34 p.m. Singapore time), the Dow Jones Industrial Average was down 61.69 points, or 0.29 per cent, at 21,568.03, the S&P 500 was down 5.71 points, or 0.23 per cent, at 2,453.43. The Nasdaq Composite was down 16.48 points, or 0.26 per cent, at 6,297.95. Eight of the 11 major S&P 500 sectors were lower, with the healthcare index's 0.50 per cent fall leading the decliners.

As the earnings season gets under way, the market will be keeping a close eye on corporate results to see if the high valuations are justified in the face of mixed economic data, tepid inflation and policy gridlock in Washington.

Analysts' are estimating an 8.2 per cent rise in second-quarter earnings for the S&P 500 companies from a year earlier.

This follows a robust first quarter when U.S. companies posted their best earnings since 2011, according to Thomson Reuters I/B/E/S. IBM, United Continental Holdings, CSX and Navient are among the companies scheduled to report results after the bell.

Netflix jumped 8.8 per cent after the streaming-television pioneer's added more subscribers than expected in the second quarter. Declining issues outnumbered advancers on the NYSE by 1,552 to 899. On the Nasdaq, 1,596 issues fell and 631 advanced.