Trump worries knock Wall Street

Wall Street dropped amid concern about US President Donald Trump's ability to deliver on his promises to cut taxes and regulations. Photo / AP

Wall Street dropped amid concern about US President Donald Trump's ability to deliver on his promises to cut taxes and regulations.

Trump warned fellow Republicans in the House of Representatives they would face "political problems" for opposing the bill that takes apart Obamacare and partially replaces it, Reuters reported. The House is set to vote on the American Health Care Act on Thursday.

"If we are not able to move forward with health-care reform, it endangers tax reform," Representative Bill Flores of Texas, a former chairman of a House conservative caucus, told Bloomberg on Friday. "The folks that were able to tear this down would feel like they're empowered to tear the next big project down."

In 1.43pm trading in New York, the Dow Jones Industrial Average shed 0.9 per cent, while the Nasdaq Composite Index dropped 1.4 per cent. In 1.28pm trading, the Standard & Poor's 500 Index slid 1 per cent.

"Republicans should have prioritised tax reform ahead of healthcare reform," Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin, told Reuters. "They're coming across as a motley crew rather than a party that can get things done."

Declines in shares of Goldman Sachs and those of the Caterpillar, down 2.9 per cent and 2.8 per cent respectively, led the Dow lower.

"With the health-care morass, the Trump effect is taking a little bit of a backseat in peoples' minds," Steve Sosnick, an equity risk manager at Timber Hill, the market-making unit of Greenwich, Connecticut-based Interactive Brokers Group, told Bloomberg.

"It feels like the market needs another catalyst," Sosnick noted. "The catalysts had been coming largely from the Fed and the Trump effect. Something is spooking people."
US Treasuries rose, pushing the yield on 10-year notes three basis points lower to 2.43 percent.

Shares of General Mills fell after the company, whose brands include Cheerios, Betty Crocker, Yoplait, Old El Paso and Häagen-Dazs, posted a slide in sales for the seventh straight quarter as its pricing wasn't as competitive as that of its rivals.

"Our net sales declined due primarily to gaps in pricing and promotional activity in key US businesses," Chief Executive Officer Ken Powell said in a statement. "Our cost savings efforts helped us expand our adjusted operating profit margin and drive growth in adjusted diluted" earnings per share.

Net sales declined 5.2 per cent to US$3.79 billion in the quarter ended February 26, as yoghurt sales dropped. However, gross margin rose 60 basis points to 34.5 per cent of net sales in the quarter.

The stock traded 0.4 per cent weaker at US$60 as of 1.13pm in New York.

In Europe, the Stoxx 600 Index finished the session with a 0.5 per cent slide from the previous close, as shares of commodity producers fell. France's CAC 40 Index slipped 0.2 per cent, the UK's FTSE 100 Index fell 0.7 per cent, while Germany's DAX Index retreated 0.8 per cent.