* S&P 500 posts biggest one-day drop in six weeks
* Tech-heavy Nasdaq leads broad declines
* Alphabet falls after record EU antitrust fine
* Indexes down: Dow 0.46 pct, S&P 0.81 pct, Nasdaq 1.61 pct
(Updates to close of U.S. markets)
By Lewis Krauskopf
June 27 (Reuters) – The tech-heavy Nasdaq led a broad Wall
Street decline on Tuesday with stocks falling more sharply after
a healthcare bill was delayed in the U.S. Senate, raising fresh
questions about President Trump’s domestic agenda.
The benchmark S&P 500 posted its biggest one-day drop in
about six weeks and closed at its lowest point since May 31.
Major indexes extended losses after U.S. Senate Republican
leader Mitch McConnell decided to put off a planned vote on a
bill to dismantle the Affordable Care Act until after the
Senate’s July 4 recess.
The healthcare legislation, which has encountered resistance
from several Republicans, is the first plank of Trump’s domestic
policy agenda, with investors eager for him to move onto his
other plans including tax cuts, infrastructure spending and
Promises for such domestic polices helped fuel a
13.1-percent rise for the benchmark S&P 500 since Trump’s Nov. 8
“The market likes certainty, and now there’s uncertainty,”
said Peter Costa, president of trading firm Empire Executions in
New York. “What is this going to look like when this gets out of
the next iteration? That uncertainty I think is just having
people pause a little bit.”
“I also think that when the market gets to certain levels,
any type of uncertainty, especially in anything that has to do
with the administration, will have an adverse effect,” Costa
The Dow Jones Industrial Average fell 98.89 points,
or 0.46 percent, to 21,310.66, the S&P 500 lost 19.69
points, or 0.81 percent, to 2,419.38 and the Nasdaq Composite
dropped 100.53 points, or 1.61 percent, to 6,146.62.
Big tech names weighed most heavily on the S&P 500. Google
parent Alphabet fell 2.5 percent after EU antitrust
regulators hit the tech giant with a record $2.7-billion fine.
The Nasdaq had its worst day since a tech-led slide on June
9 raised questions about the sector.
On Tuesday, the tech sector pulled back 1.7
percent. It remains the best-performing major group this year.
“There is some thinking that they ran up too quickly, and if
there’s an excuse to sell then we get some traders come in and
sell into that weakness,” said Bucky Hellwig, senior vice
president at BB&T Wealth Management in Birmingham, Alabama.
The healthcare sector weakened after news of the
vote delay, and ended down 0.9 percent.
Financials were the only sector to end in positive
territory, rising 0.5 percent.
Data showed consumer confidence for June rose more than
expected, which could bolster the Fed’s case for another rate
hike this year.
Philadelphia Fed President Patrick Harker said the Fed
rightly plans to raise rates once more this year, given recent
inflation weakness is likely temporary.
U.S. Federal Reserve Chair Janet Yellen said she does not
believe there will be another financial crisis for at least as
long as she lives, thanks largely to reforms of the banking
system since the 2007-09 crash.
Investors are gearing up for second-quarter corporate
earnings season after a strong first quarter, with the S&P 500
trading at nearly 18 times forward earnings estimates, well
above its long-term average of 15 times.
“On an earnings basis, the market appears to be fully valued
and we need to see fiscal policy, tax and regulatory reform, to
drive GDP growth and then stock prices,” said Ernie Cecilia,
chief investment officer of Bryn Mawr Trust in Bryn Mawr,
Declining issues outnumbered advancing ones on the NYSE by a
1.89-to-1 ratio; on Nasdaq, a 1.98-to-1 ratio favored decliners.
(Additional reporting by Tanya Agrawal in Bengaluru; Editing by