Stocks, dollar cut losses on hope Trump can move past healthcare

Mon Mar 27, 2017 4:37pm EDT
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By Saqib Iqbal Ahmed

NEW YORK (Reuters) - Stocks, the dollar and U.S. long-dated Treasury yields steadied after sharp drops on Monday, as investors hoped U.S. President Donald Trump will be able to bolster the economy despite a defeat over healthcare reform.

Trump's failure to rally enough support from his own party, - which controls both houses of the U.S. Congress, to repeal and replace Obamacare spurred a rush to safe-haven assets such as gold XAU=, the Japanese yen JPY= and the Swiss franc CHF= before nerves steadied.

A dip in risk appetite also dominated Asian and European stock markets, and MSCI's all-country world equity index .MIWD00000PUS was down 0.11 percent. The index, which fell to a near two-week low after Wall Street stocks hit their lowest levels in about six weeks at the open, recovered ground as major U.S. stock indexes trimmed losses.

The Nasdaq Composite .IXIC finished the day positive, while the Dow Jones Industrial Average .DJI ended the day down 0.22 percent, its eighth straight day of declines. [nZXN0RZA2I]

"The market is still cautiously optimistic that the Trump White House will be able to push through many of their pro-business policies, and I think a lot of people are hopeful the Trump rally can continue through at least the middle of the year," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

The S&P 500 .SPX lost 2.39 points, or 0.10 percent, to close at 2,341.59 and the Nasdaq added 11.64 points, or 0.2 percent, to end at 5,840.37.

European shares were hit by losses among miners and banks. Europe's broad FTSEurofirst 300 index .FTEU3 closed down 0.37 percent at 1,479.05.

The U.S. dollar slipped, briefly falling to its lowest since November against a basket of currencies, as investors lost confidence in prospects for a U.S. fiscal spending boost under the Trump administration.   Continued...

A trader looks at screens while working on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 27, 2017.  REUTERS/Lucas Jackson