While you were sleeping: UPDATED Trump worries finally hit Wall Street

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

Mr 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.”

Wall Street's biggest fall this year
At the close of trading in New York,The Dow Jones Industrial Average fell 237.85 points, or 1.1%, to 20,668.01, posting its worst day since September.

The Standard & Poor's 500 fell 1.2%, to 2344.02 and the Nasdaq Composite lost 1.8% to 5793.83. 

“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% and 2.8% 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.”

Bond prices rise
Government bonds strengthened. The yield on the 10-year Treasury note fell to 2.432% from 2.472% on Monday. 

The US dollar, which reached a 14-year high after Mr Trump’s victory, fell to its lowest level in four months. The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, lost 0.4%.

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% to $US3.79 billion in the quarter ended February 26, as yoghurt sales dropped. However, gross margin rose 60 basis points to 34.5% of net sales in the quarter. The stock traded 0.4% weaker at $US60.

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

(BusinessDesk)