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Wall Street in lacklustre start as financials offset healthcare

05:44 UTC+8 March 28, 2017 | Lucia Stein

Some of Wall Street's earlier losses were made up in late trading as investors picked up bargain stocks. (Reuters)

Wall Street was off to a lacklustre start to the week as losses in financial stocks offset gains in healthcare shares.

Markets at 8:00am (AEDT):

  • ASX SPI 200 futures +0.27pc to 5,752
  • AUD: 76.18 US cents, 60.61 British pence, 84.33 Japanese yen, 70.12 eurocents, $NZ1.08
  • US: S&P 500 -0.10pc to 2,341, Dow Jones -0.22pc to 20,550, Nasdaq +0.2pc to 5,840
  • Europe: Euro Stoxx -0.27pc to 366.78, FTSE -0.59pc to 7,293
  • Commodities: Gold +0.76pc to $US1,254.77/ounce

US stocks came under pressure from heavy selling overnight after President Donald Trump failed to push through his healthcare legislation on Friday.

Republicans were forced to pull the healthcare bill after failing to secure enough votes needed in Congress, causing investors to lose confidence in Mr Trump's ability to deliver on proposed tax cuts.

But opinion on this matter is split with some analysts and investors optimistic the failure of the healthcare plan will allow for quicker action on Mr Trump's economic agenda.

According to an ANZ analyst note, markets reacted "as expected" in the aftermath of the failure to deliver proposed reforms and repeal of Obamacare, but the moves were relatively muted.

"US equities, which continue to anticipate a more regulatory friendly environment and increased fiscal spending, [continue] to drive higher earnings growth," it said.

"Time will tell with a lot of optimism priced in, but there being little concrete evidence yet."

Analysts are awaiting a US consumer reading, expected to be released tonight, for signs that the positive economic outlook announced by the Federal Reserve has translated to higher spending.

On Friday, another ANZ note suggested that the recent policy gridlock came at a time when it should be much easier for the presidency to pass legislation.

"It clearly highlights that divides remain, and it means that the policy paralysis that was often evident over recent years (when no party had outright control) could linger," analysts said.

The analyst note suggests that some believe paralysis is a reason why businesses have been reluctant to invest, given the "uncertainty that a lack of fiscal policy direction created".

"With fiscal policy uncertainty rising again the risk is that business and consumer sentiment reverse recent gains, which would have growth consequences," it said.

"For markets, that doesn't sound like an ideal situation. Not only would they then be grappling with unwinding some of the euphoria priced in by Mr Trump's fiscal plans, but also dealing with the possibility of a softening tone in some of the underlying economic data."

The US dollar also fell to four month lows.

But some of Wall Street's earlier losses were made up in late trading as investors picked up bargain stocks.

European stocks also slipped overnight, weighed down by losses in mining and banking stocks.

The Basic Resources index was the worst performer, falling more than 3 per cent, as copper prices eased following Mr Trump's healthcare setback.

Locally, the market is on track for a slight rise at the open.

The Australian dollar is fairly steady and a short time ago was worth $US76.18.

West Texas Crude oil is falling to $US46.97 a barrel, a barrel of Tapis is worth $US51.76 and spot gold is up at $US1,254 an ounce.

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