Wall Street opened higher on Friday, helped by a rise in technology shares and ahead of a closely watched vote on a healthcare bill seen as a test of President Donald Trump’s ability to pass his legislative agenda through Congress.
It was not clear late on Thursday evening that Trump and Republican leaders had enough support to pass the bill, with Trump warning lawmakers from his party that he will leave Obamacare in place if they do not rally around him.
Investors fear that a failure to pass the bill could endanger Trump’s promises of tax cuts and stimulus.
On Tuesday, Wall Street recorded its worst one-day loss since before the U.S. presidential election due to these concerns. The Dow and S&P 500 are now on track to post their first monthly declines since October.
“Yes, the delay is a disappointment but the bill hasn’t failed,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
“Unfortunately, we are going to get bogged down by this a little bit which does push out the timing of tax reform though we can still have the framework for the tax reform by October and still have it in 2018. I think the market is starting to digest that a little with the selloff we had on Tuesday.”
The CBOE Volatility index .VIX, Wall Street’s “fear gauge”, closed at its highest level in more than two months on Thursday and continued to hover near that mark on Friday.
The S&P has risen about 10 percent since Trump’s election as U.S. president on Nov. 8.
The Nasdaq Composite .IXIC was up 25.99 points, or 0.45 percent, at 5,843.68.
Nine of the 11 major S&P sectors were higher, with the technology index’s .SPLRCT 0.54 percent rise leading the advancers.
Micron Technology (MU.O) jumped 12.3 percent to $29.60, a day after the chipmaker’s current-quarter revenue and profit forecasts beat expectations. The stock was the biggest boost to the S&P and the Nasdaq.
Oil edged higher, boosted by hopes that an OPEC output cut was beginning to balance a long-oversupplied market, but benchmark prices were on track for weekly losses. [O/R]
Data on Friday showed new orders for key U.S.-made capital goods unexpectedly fell in February, but shipments surged.
The Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dipped 0.1 percent last month after rising 0.1 percent in January.
GameStop (GME.N) fell 11.8 percent to $21.13 after the company’s full-year profit forecast fell far below estimates.
Advancing issues outnumbered decliners on the NYSE by 1,800 to 680. On the Nasdaq, 1,520 issues rose and 571 fell.
The S&P 500 index showed four new 52-week highs and one new low, while the Nasdaq recorded 22 new highs and 12 new lows.
(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D’Silva)