Stocks Fall Following Health Care Fail

NEW YORK (AP) -- U.S. stocks and the dollar are slipping Tuesday morning after the latest Republican health care bill failed in the Senate. Drugmakers and health insurers are trading lower. Elsewhere, banks are falling as bond yields and interest rates decrease. Streaming video company Netflix is surging after it gained more than 5 million subscribers in the second quarter, which is giving consumer-focused companies a boost.

KEEPING SCORE: The Standard & Poor's 500 index slid 2 points, or 0.1 percent, to 2,457 as of 10:10 a.m. Eastern time. The Dow Jones industrial average lost 52 points, or 0.2 percent, to 21,577. The Nasdaq composite was unchanged at 6,315. The Russell 2000 index of smaller-company stocks fell 3 points, or 0.2 percent, to 1,428. The Russell 2000 closed at an all-time high Monday while the Dow and S&P 500 set records Friday.

Most of the companies on the New York Stock Exchange traded lower.

HEALTHCARE REFORM: The Senate Republican health care bill suffered a potentially fatal setback late Monday when two more GOP senators announced they opposed it, which meant the proposal does not have enough support to proceed to a full vote. Senate leaders said they will next try to repeal the 2010 Affordable Care Act without creating a replacement, but that does not appear to have enough votes to pass either.

Most health care stocks traded lower Tuesday as investors tried to divine what will come of the Republican health care effort. Generic drugmaker Perrigo sank $1.41, or 1.9 percent, to $72.47 and drug distributor Cardinal Health fell $1.14, or 1.5 percent, to $76.95.

Health insurers also declined even though UnitedHealth, the largest company in the industry, reported strong second-quarter results. UnitedHealth dropped $2.24, or 1.2 percent, to $184.11 and Humana lost $4.67, or 2 percent, to $232.89.

DOLLAR DIVES: The dollar slipped again as the agenda of President Donald Trump appeared to be in greater jeopardy. Trump proposed greater infrastructure spending and cuts in taxes and regulation to boost the economy, but after six months in office investors increasingly wonder how much of that will happen. The dollar has steadily lost ground for most of this year and the ICE US dollar index is now at its lowest level since August.

The dollar slid to 111.90 yen from 112.66 yen. The euro rose to $1.1582 from $1.1480. The euro hasn't been this strong compared to the dollar since early 2015.

STILL WATCHING: Netflix jumped after the company said it added 5.2 million subscribers over the last three months, and for the first time, it has more subscribers outside the U.S. than in it. The second quarter is usually a slow period for Netflix, so investors were pleased to see the healthy gain. They seemed less concerned about the company's high costs. Netflix gained $15.53, or 9.6 percent, to $177.23.

HOG NOT SO WILD: Harley-Davidson skidded after its sales fell short of Wall Street estimates. The motorcycle maker cut its estimate of how many vehicles it will ship and it also expects weaker profit margins. The stock gave up $5.56, or 10.7 percent, to $46.38.

DIAL TONE: Swedish mobile networks company Ericsson said network and software sales fell in the second quarter, and said it doesn't expect improvement any time soon. The company said it will cut more spending and its stock shed $1.01, or 13.9 percent, to $6.27.

BONDS: Bond prices rose. The yield on the 10-year Treasury note slid to 2.27 percent from 2.31 percent. That helped send bank stocks lower.

Bank of America reported a bigger profit Tuesday thanks to higher interest rates even though the calm market led to a drop in its trading revenue. Investment bank Goldman Sachs reported flat earnings and its trading desk had another rough quarter, with a big drop in revenue from bond, currency and commodities trading. Unlike consumer banks, Goldman makes most of its money from trading securities and advising companies.

While both companies did better than analysts expected, it wasn't enough to get investors excited. Goldman lost $1.83 to $227.43 and Bank of America declined 18 cents to $23.84. Comerica, which also topped estimates, fell $1.30, or 1.7 percent, to $73.22.

ENERGY: Benchmark U.S. crude added 41 cents at $46.43 a barrel in New York while Brent, the international standard, rose 47 cents, or 1 percent, to $48.89 a barrel in London.

OVERSEAS: The DAX in Germany dropped 1.3 percent and France's CAC 40 fell 1 percent. The British FTSE 100 index slipped 0.3 percent. Japan's benchmark Nikkei 225 lost 0.6 percent as the yen gained against the dollar. The Kospi in South Korea was flat. Hong Kong's Hang Seng climbed 0.2 percent.

(BE)