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Wall St: US stocks slip on rising healthcare regulatory fees

Friday, 17 Mar 2017 06:03:19 | Lucia Stein

Traders took a break from buying, with a small fall on Wall Street overnight. (Reuters)

Stocks in the United States have edged lower overnight, with losses in healthcare stocks weighing on the market after President Donald Trump flagged higher regulatory costs for the sector.

Markets at 8:00am (AEDT):

  • ASX SPI 200 futures -0.1pc to 5,77
  • AUD: 76.75 US cents, 62.14 British pence, 86.97 Japanese yen, 71.31 euro cents, $NZ1.09
  • US: S&P 500 -0.16pc to 2,381, Dow Jones +0.07pc to 20,934, Nasdaq +0.01pc to 5,900
  • Europe: Euro Stoxx +0.82pc to 367.30, FTSE +0.64pc to 7,415, DAX +0.6pc to 12,083
  • Commodities: Gold +0.61pc to $US1,226.08/ounce, Brent crude -0.2 to $US51.72

The Trump administration's proposed budget documents indicated more than $2 billion in fees, twice as much as 2017, will be collected from the healthcare industry by the US Food and Drug Administration.

The proposal also included cutting federal funding for medical research by nearly 20 per cent, which was enough to create some uncertainty among traders.

However, the broader losses were offset somewhat by a rebound in financial stocks.

According to an ANZ analyst note, there is definitely a sense that the US Federal Reserve is moving into a more "earnest phase" of the tightening cycle and whilst still gradual, it is considerably more advanced than other major central banks.

That interest rate tightening cycle already appears to be affecting Australia, with NAB using rising funding costs as a justification for raising its variable mortgage rates.

IG's Chris Weston said he is expecting other Australian banks to follow NAB's lead.

"The NAB got much press for lifting the cost of home loans and investors are asking which bank will be next off the rank, as NAB's SVR is now the highest of the big four and just shy of BOQ's," he wrote.

US multinational computer technology corporation Oracle was one of the stand-out performers in the session after it announced a better-than-expected quarterly profit.

European stocks also hit their highest levels in 15 months, on the back of centre-right Prime Minister Mark Rutte's election win in the Netherlands.

The Bank of England left interest rates unchanged overnight, as expected, in a bid to help the economy as Britain prepares to exit the European Union.

The bank also edged up its forecast for economic growth in the first quarter to 0.6 per cent.

Locally, the market is on track for a flat open.

The Australian dollar was lower this morning and a short time ago was worth 76.72 US cents.

West Texas crude oil had slipped to $US48.25 a barrel.

AustraliaPlus


 

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