Republicans' failed healthcare bill raised doubts among investors today about the prospects for potential tax reform, deregulation and infrastructure spending, noted one industry observer.
"I think we came in today sort of sloshing around concern that this is a black eye for the new administration," Wunderlich Securities chief market strategist Art Hogan said, noting that markets might be assuming that the new administration will have difficulty legislating, though he doesn't think that is "necessarily true."
Hogan noted that postelection stock movements were partly predicated on fundamentals be it earnings or the economic data, and partly on "pro-growth agenda that we possibly helped put in the place this year."
So, when it appeared that the new health care bill was going to take a while or not get any traction in the House of Representatives, the markets tried to extrapolate if everything, including tax reform, deregulation or infrastructure spending, is also going to have difficulty.
"As it pertains to the financials, I think financials are really the poster child for everything this administration wants to do to stimulate the economy," said Hogan. He noted that except for the health care bill, everything else is positive. However, for that to be true yield curve needs to be steep, which is flat at the moment, he added.
Against this backdrop, U.S. bank stocks closed in negative territory Monday, March 27. The SNL U.S. Bank Index decreased 0.38% to 526.16, while the SNL U.S. Thrift Index was up 0.10% to 907.88. The Dow Jones Industrial Average lost 0.22% to 20,550.98, the Nasdaq composite index advanced 0.20% to 5,840.37, and the S&P 500 slid 0.10% to 2,341.59.
Among the nation's biggest banks, JPMorgan Chase & Co. slipped 0.06% to $87.24, Bank of America Corp. retreated 0.39% to $23.03, Wells Fargo & Co. fell 0.79% to $55.39, and Citigroup Inc. was up 0.45% to $58.33.
Among other price movers, Northeast Bancorp increased 3.34% to $15.45, and Central Valley Community Bancorp edged 3.18% higher to $19.81, while Independent Bank Group Inc. declined 3.06% to $60.25 and MidSouth Bancorp Inc. lost 4.08% to $14.10.
In the thrift space, Charter Financial Corp. added 4.19% to $19.13, and TrustCo Bank Corp NY lost 1.28% to $7.70.
Market prices and index values are current as of the time of publication and are subject to change.