Closing Market Summary: Stocks Finish Flat After AHCA Vote PulledThe major averages opened Friday with modest gains as investors were cautiously optimistic that the American Health Care Act would pass in the House. However, that positive sentiment faded as the day wore on and reports from Washington indicated that the GOP still hadn't acquired the necessary votes. In the end, the health care bill was pulled from consideration and the major averages finished mixed. The S&P 500 (-0.1%) settled just below its unchanged mark while the Dow (-0.3%) and the Nasdaq (+0.2%) closed on opposite sides of the benchmark index.
Today's relatively modest reaction to disappointing news likely had its roots in President Trump's ultimatum for House Republicans. The president made it clear that, if the American Health Care Act didn't make it out of the House on Friday, his administration would be moving on to tax reform. That notion is somewhat comforting to investors, but since health care reform went nowhere, the reliability of such a promise will certainly be put into question.
The House vote that was anticipated throughout the day tied investors' hands, leaving most sectors within 0.3% of their respective flat lines. The utilities (+0.4%), materials (-0.9%), and energy (-0.5%) spaces were an exception. The energy group's slip occurred despite crude oil's positive performance; the energy component settled 0.7% higher at $48.01/bbl.
In corporate news, Micron Technology (MU 28.43, +1.96) spiked 7.4% after reporting better than expected earnings and upbeat guidance. The positive sentiment caught on within the semiconductor industry, evidenced by the 0.8% increase in the PHLX Semiconductor Index, and provided some support for the top-weighted technology sector (+0.1%).
In the Treasury market, U.S. sovereign debt moved modestly higher, leaving the benchmark 10-yr yield lower by two basis points at 2.40%.
Economic data was limited to Durable Orders:
- February durable goods orders rose 1.7%, which is above the 1.3% uptick expected by the consensus. The prior month's reading was revised to 2.3% (from 1.8%). Excluding transportation, durable orders increased 0.4% (consensus 0.7%) to follow the prior month's revised uptick of 0.2% (from -0.2%).
- There were two key takeaways from the report: (1) business spending was relatively weak and (2) the upside surprise for February combined with the upward revisions for January should lead to some upward revisions to Q1 GDP forecasts
Investors will not receive any data on Monday.
- Nasdaq Composite +8.3% YTD
- S&P 500 +4.7% YTD
- Dow Jones Industrial Average +4.2% YTD
- Russell 2000 -0.2% YTD
