Stocks Fall, Bonds Rise as Health Vote Pulled: Markets Wrap

(Bloomberg) -- U.S. stocks rose from session lows to end little changed as investors assessed the fallout from a failed health-care vote that has raised questions on Trump administration’s ability to push its pro-growth agenda through Congress. Treasuries rose and the dollar slipped.

The S&P 500 Index capped its worst week since the election as political wrangling in Washington dominated sentiment. Banks sank 3.8 percent in the week, though losses were limited Friday after Donald Trump suggested to the Washington Post that he will turn his attention to tax reform. The yield on 10-year Treasury notes fell to 2.40 percent, while the dollar fell for a second week.

Investors were left assessing the impact of the failed vote on the future of Trump’s pro-growth agenda after the battle captivated Wall Street for most of the week. The White House had threatened to move on to other policy priorities, including tax reform, though its ability to sail its agenda through Congress was thrown into doubt. The reflation trades sparked by Trump’s election have faltered in March, with the dollar down 1.6 percent and the S&P 500 headed for its worst month since October.

“Whatever the case may be, tax reform was always second on the agenda. What may have changed is that now they’ll go to tax reform next and not come back to this,” Joe LaVorgna, Deutsche Bank AG chief U.S economist, said in a phone interview.

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Here are the main moves in markets:

Stocks

• The S&P 500 ended 0.1 percent lower at 2,343.98 at 4 p.m. in New York. The index fell 1.4 percent in the five days, its worst week since Nov. 4.

• Banks led losses in the week with a 3.8 percent rout that was the biggest since January 2016. Health-care shares slid 1.3 percent in the week.

• The Stoxx Europe 600 Index fell 0.2 percent to cap a 0.5 percent drop in the year.

• Japan’s Topix trimmed some losses for a week that included the biggest one-day drop since Trump’s election. The index finished with a 1.4 percent decline for the week. The MSCI Asia Pacific fared better, with a 0.1 percent decrease.

Currencies

• The Bloomberg Dollar Index lost 0.1 percent as it heads for a weekly slide of 0.7 percent. The measure Thursday eked out a gain to snap a six-day losing streak.

• The British pound weakened 0.3 percent to $1.2479, while the euro added 0.1 percent to $1.0797.

• The Mexican peso has rallied about 9 percent versus the dollar this year, setting up for the best first quarter performance in more than two decades.

Bonds

• U.S. Treasuries rose, pushing the 10-year yield down to 2.41 percent.

• Ten-year yields remained pinned between the average price over the past 50 days and the 100-day moving average for a third straight day.

• European bonds shrugged off stronger-than-expected purchasing managers data out of Germany and France. French 10-year yields dropped six basis points to 0.982 percent.

• The yield on bund benchmarks fell three basis points to 0.40 percent.

Commodities

• Crude capped a weekly loss as OPEC and its market allies prepared to review cuts, while rising U.S. inventories indicated the measures aren’t working yet.

• West Texas Intermediate rose 27 cents Friday to settle at $47.97 a barrel, trimming the weekly loss to 1.7 percent.999

• Gold futures were little changed near $1,250, holding the week’s gain at 1.4 percent.

• Iron ore futures in China posted an unprecedented weekly loss; the most-active contract in Singapore is lower for a sixth day; and spot prices had the biggest slump since November.

--With assistance from Blaise Robinson Robert Brand Natasha Doff Mark Shenk Elizabeth Stanton and George Lei

To contact the reporters on this story: Jeremy Herron in New York at jherron8@bloomberg.net, Julie Verhage in New York at jverhage2@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Cecile Gutscher

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