Stocks fell on Thursday afternoon after House leaders delayed a highly anticipated vote on the Republicans' repeal-and-replace health care bill.
The S&P 500 was down 0.2%, the Dow Jones Industrial Average slid 0.1%, and the Nasdaq declined 0.2%.
The vote has been delayed until further notice, Politico reported late in the session Thursday. Donald Trump and House Speaker Paul Ryan have had difficulty whipping up support for the bill.
The Trump administration has implored lawmakers in closed-door meetings to support the bill and has made concessions, including reportedly dropping the minimum benefits insurers must provide. Trump reportedly told lawmakers that their seats would be on the line in 2018 if they didn't back the bill. Republicans can afford to lose just 21 votes from their party.
"The health care bill is really the first 'put up or shut up' moment of Trump's presidency," said Brad McMillan, chief investment officer for Commonwealth Financial Network. "Up to now, we have had a rally based on the expectation that Trump and the Republicans were going to enact meaningful change. Hope has been the dominant emotion since the election, and all of the political noise has been viewed in that context."
The American Health Care Act, designed to replace the Affordable Care Act (better known as Obamacare), has been widely criticized on both sides of the aisle. The Congressional Budget Office calculated that 24 million more people will be uninsured by 2026 under the Republicans' bill, including 14 million more by 2018. Premiums are expected to jump 20% in the individual market in 2018 and 2019.
The passage of the bill is seen by Wall Street as a test as to whether a Trump administration can enact all it has promised, particularly pledge tax cuts and regulatory reform. Patience with the slow progress of health care and financial reforms wore thin earlier in the week, sending stocks spiralling to their worst losses of the year.
"Recent market weakness may reflect that ebbing of hope, because if health care reform can't be done, tax reform looks much less likely as well," added McMillan. "This bill really is a reality check on whether the Republicans can deliver on their policy promises. If not, the premise of a new, low regulation and low tax era may be reconsidered."
The financials sector drove the bulk of gains on Thursday, recovering from a large selloff earlier in the week. Bank of America (BAC) - Get Report , Citigroup (C) - Get Report , JPMorgan (JPM) - Get Report and Wells Fargo (WFC) - Get Report were higher, while the Financial Select Sector SPDR ETF (XLF) - Get Report increased 0.8%.
New home sales surged to seven-month highs in February as high demand overcame constrained inventory. Sales of newly built houses in the U.S. rose by 6.1% month over month to a seasonally adjusted annual rate of 592,000, according to the Commerce Department. Sales were at their second-highest since 2008 and came in higher than estimates of 571,000.
Federal Reserve Chair Janet Yellen refrained from speaking about the economic outlook and interest rates in her opening keynote address at the Federal Reserve System Community Development Research Conference in Washington. Instead, Yellen spoke on new research highlighting how important basic work skills are for young people and how the research will benefit the labor market. She also spoke on the importance of research into new programs for poor children to develop skills.
Minneapolis Fed President Neel Kashkari, the only member of the Fed who didn't agree interest rates should be raised earlier this month, is scheduled to participate in a Q&A session at the conference at 12:30 p.m. The Fed voted to raise interest rates by 25 basis points at its meeting this week.
Weekly jobless claims unexpectedly rose, while revisions showed higher claims this year than previously seen. The number of new claims for unemployment benefits increased by 15,000 to 258,000 in the past week. Analysts anticipated claims to fall to 240,000 from 243,000. The less-volatile, four-week claims average increased by 1,000 to 240,000.
London Metropolitan Police said Thursday their investigation into the deadly terrorist attack Wednesday outside the Palace of Westminster in central London that left four people dead and 40 more injured would focus on the attacker's "motivation and preparation." Police arrested eight suspects in overnight raids. U.K. Prime Minister Theresa May said the suspected Westminster attacker was British-born. May also confirmed Thursday that 40 were injured in the attack, including one American.
Walt Disney (DIS) - Get Report announced that it has extended CEO and Chairman Bob Iger's contract until July 2, 2019. Orin C. Smith, independent lead director of the board, said in a statement that the company and shareholders would be "best served by his continued leadership as the Board conducts the robust process of identifying a successor and ensuring a smooth transition." Iger's contract was originally set to expire in June 2018. Shares were up 0.6% on Thursday.
Whole Foods Market (WFM) was down more than 1% on Thursday after UBS initiated coverage of the stock with a "sell" rating and $25 price target. UBS analyst Michael Lasser told CNBC that he believes Whole Foods is struggling to fend off its competitors including Trader Joe's and Sprout's Farmer's Market (SFM) - Get Report.
Five Below (FIVE) - Get Report increased 11% after exceeding quarterly estimates on double-digit growth in revenue. Sales increased 19%, while comparable sales climbed 1%. The retailer opened a net five new locations over the quarter.
PVH (PVH) - Get Report surged 9% after reporting a better-than-expected quarter. The parent of Calvin Klein earned an adjusted $1.23 a share over the quarter, down from $1.52 a year earlier, though above estimates of $1.19. Revenue of $2.1 billion was flat from a year earlier and met expectations. The board authorized $750 million to be added to its current share repurchase program.
Accenture (ACN) - Get Report fell 4% after reporting a drop in quarterly earnings. Second-quarter earnings of $1.33 a share fell from $2.08 a year earlier. Analysts anticipated earnings of $1.30. Revenue increased 4% to $8.76 billion, below estimates of $8.77 billion. The company also said it anticipates a $425 million charge tied to its U.S. pension cuts.
Conagra (CAG) - Get Report rose 1% after topping quarterly earnings estimates. Net income of 41 cents a share came in 5 cents lower than a year earlier. However, adjusted earnings of 48 cents a share beat consensus by 4 cents. Revenue of $1.98 billion came in slightly short of a $1.99 billion target.
Ford (F) - Get Report declined by 2% after issuing disappointing earnings guidance for its first quarter. The automaker said it anticipates earnings between 30 cents and 35 cents a share, well below consensus of 47 cents. A weaker bottom line was tied to lower volume, currency exchange woes, and increased costs.
Flexion (FLXN) - Get Report shares were up 36% on Thursday following reports that Sanofi (SNY) - Get Report was nearing a $1 billion plus bid to purchase the arthritis-focused biotech company. Flexion's board has reportedly voted to accept the offer.