U.S. stocks were well off session lows on Monday as investors sought bargains after a rough start on Wall Street following the defeat of President Donald Trump’s first major legislative action.
Republicans were forced to pull a healthcare bill on Friday after failing to gather the votes needed in Congress to repeal and replace the Affordable Care Act also called Obamacare.
The bill’s failure led investors to question Trump’s ability to deliver on his ambitious agenda of tax cuts and simpler regulations – key catalysts that have sparked a record-setting rally on Wall Street.
“It is less of a panic sell and more of digesting the information and looking beyond the healthcare reform act to the next bit of information, which is going to be tax reform and spending on infrastructure,” said Mark Watkins, regional investment manager at the Private Client Group at U.S. Bank.
“With the economy continuing to improve, I would look at any pullback as a buying opportunity at this point in time,” Watkins said.
At 12:49 p.m. ET, the Dow Jones Industrial Average .DJI was down 59.46 points, or 0.29 percent, at 20,537.26, the S&P 500 .SPX was down 5.17 points, or 0.22 percent, at 2,338.81 and the Nasdaq Composite .IXIC was down 0.34 points, or 0.01 percent, at 5,828.40.
The S&P 500 financial index came off a two-month low on Monday, while other major S&P sectors trimmed losses.
Healthcare .SPXHC was the only sector in the black, propelled by gains in drugmakers and hospital operators.
Prices of safe-haven gold pared some gains after hitting a one-month high, while the CBOE Volatility index .VIX, Wall Street’s fear gauge, eased from the day’s high of 15.11.
Still, the Dow remained on track for the eighth straight day of losses – its longest losing streak since 2011.
Declining issues outnumbered advancers on the NYSE by 1,754 to 1,127. On the Nasdaq, 1,511 issues fell and 1,248 advanced.
The S&P 500 index showed 11 new 52-week highs and seven lows, while the Nasdaq recorded 44 new highs and 45 new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D’Silva)