Stock Market News For June 28, 2017

Benchmarks finished in negative territory on Tuesday, dragged down by healthcare and technology shares. Postponement of a vote on the Senate healthcare Bill raised questions over implementation of President Trump’s other pro-growth agendas including tax reforms. Technology shares continued to drop following decline in shares of major tech companies including Alphabet.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) declined 0.5% to close at 21,310.66. The S&P 500 fell 0.8% to close at 2,419.38. The tech-heavy Nasdaq Composite Index decreased 1.6% to finish at 6,146.62, marking its second consecutive decline. The S&P 500 recorded its fourth decline in past six sessions, while the Dow has declined in five of past six sessions. The Dow, the S&P 500 and Nasdaq have advanced 7.8%, 8.1% and 14.2% respectively on a year to date basis. The fear-gauge CBOE Volatility Index (VIX) traded near 11. Decliners outnumbered advancing stocks on the NYSE by a 1.37 to 1 ratio.

Delay on Health Care Legislation Vote

Senate Republicans leader Mitch McConnell decided to postpone a planned vote on healthcare Bill, which was released last Thursday to revoke and replace Obamacare. The Obamacare replacement Bill was postponed until after July 4, as the Bill faced resistance from several GOP members.

The Senate Healthcare Bill proposes to repeal key sections of Obama’s Affordable Care Act including reduction of taxes on high income earners and adjustment of subsidy to poor people for private insurance. The Senate Bill also proposes to continue Medicaid expansion under Obamacare for the next three years and plans to roll it back in 2021.

However, as of late Tuesday, five Republicans opposed the Bill, saying that they would continue to resist the Bill until and unless changes are made to it. As per the nonpartisan Congressional Budget Office’s estimate, the Senate Healthcare Bill would lead to 22 million more people losing insurance coverage by 2026.

As a result, the broader Health Care Select Sector SPDR (XLV) declined 0.9% which ultimately had a negative impact on broader markets. Some of its key holdings, including Pfizer Inc (NYSE:P) and Amgen Inc (NASDAQ:AMGN) fell 0.8% and 1.6% respectively.

Technology Shares Decline

Technology shares continued to decline on Tuesday, with decline in shares of major tech stalwarts. Google parent Alphabet’s (NASDAQ:GOOGL) shares dropped 2.5% following news that the tech giant was fined $2.7 billion by the European Union's antitrust regulators on account of violation of antitrust rule.

The European Commission, ruled that Google has been giving illegal priority placement to its own shopping service in search results, while pushing rivals’ search results to areas where buyers were much less likely to click. (Read More)

Additionally, decline in shares of tech stalwarts including Facebook (NASDAQ:FB) , Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) weighed on the broader markets. Shares of Facebook, Netflix and Amazon experienced a decline of 2%, 4.1% and 1.7% respectively.

The broader Technology Select Sector SPDR (XLK) declined 1.6%, finishing below its 50-day moving average for the first time since April 13. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fed Officials’ Comments

Meanwhile, investors kept a close watch on several comments from Fed policymakers on Tuesday. Fed Chairwoman Janet Yellen and San Francisco Fed President John Williams both agreed that equity and other asset markets’ valuations have increased in past few weeks. Janet Yellen in London said that valuations of asset are “somewhat rich.”

Economic Data

The Conference Board Consumer Confidence Index gained in June, after declining in May. The Index is recorded at 118.9, against consensus estimate of 115.7. The figure increased from 117.6 in May.

Stocks that made Headlines

KB Home Beats Earnings Estimates in Q2, Guides Up

KB Home (NYSE:KBH) reported stellar second-quarter fiscal 2017 results on solid housing fundamental. (Read More)

Pandora’s CEO Steps Down as Troubles Continue Unabated

Pandora Media Inc’s (NYSE:P) CEO, Tim Westergren, has stepped down from his role and will no longer serve as a board member. (Read More)

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