Thursday was supposed to be do-or-die day for House Speaker Paul Ryan's American Health Care Act, but the bill will be on life support, at least until Friday and maybe longer. A planned Thursday night vote won't happen, and it's unclear when it will happen.
Meanwhile, the Congressional Budget Office late Thursday released a new score of the revised GOP legislation, predicting a smaller deficit savings than the original bill.
The Dow industrials, S&P 500 and Nasdaq composite erased modest intraday gains on the stock market today. The Dow fell a fraction, while the S&P 500 and Nasdaq lost about 0.1%.
President Trump told reporters shortly before the market close that "we have a chance" with the health care vote, expecting the outcome to be "very close."
Earlier, the House Freedom Caucus of conservative lawmakers met with Trump without agreeing to support the bill to repeal and replace ObamaCare.
White House spokesman Sean Spicer described the meeting as positive, with some members backing the legislation. But Freedom Caucus Chairman Mark Meadows, R-N.C., later said this group still has "issues" with the bill.
Ryan delayed an expected press conference for a second time Friday.
The possibility of ObamaCare repeal failure has weighed on financial markets this week, with the Dow Jones industrial average, S&P 500 index and Nasdaq composite all suffering their steepest one-day losses since fall on Tuesday as conservatives began to close ranks against the bill.
The Trump-Freedom Caucus meeting followed a late-night agreement with House conservatives to scrap ObamaCare rules requiring insurance plans to include a comprehensive list of essential benefits. While the deal moved conservatives closer to supporting the bill, some centrist lawmakers declared their opposition, including Rep. Charlie Dent of Pennsylvania, who heads the Tuesday Group of moderate GOP lawmakers.
If ObamaCare repeal fails, some analysts were predicting a continued rough spell for financials but a potential bounce for beaten-down hospital stocks. Bank of America (BAC), Wells Fargo (WFC) and Dow component Goldman Sachs (GS) all have sliced through their 50-day moving averages this week amid concerns that President Trump's agenda of growth-fueling tax cuts and infrastructure spending could be sidelined by a failure to repeal ObamaCare.
If Ryan lacks the votes and pulls the bill, "then we think there could be renewed pressure on financial stocks as investor confidence in Congress's ability to pass President Trump's economic agenda will be further eroded," wrote Keefe, Bruyette & Woods Washington analyst Brian Gardner.
Meanwhile, shares of hospital operators Tenet Healthcare (THC) and HCA Holdings (HCA) could see a rebound. Hospital stocks have suffered in recent weeks as Ryan and Trump pushed a plan that could reduce the ranks of the insured by 24 million.
IBD'S TAKE: If the GOP fails in its bid to repeal and replace ObamaCare, don't assume that it will hamper the rest of President Trump's economic agenda. Failure is likely to focus the GOP on delivering deficit-increasing tax cuts, retroactive to 2017, to avoid a shellacking in the 2018 elections.
Mizuho analyst Sheryl Skolnick expects that the GOP will somehow find a way to get the AHCA through both the House and Senate. "If we're wrong, then on Friday we see upside to hospitals that is likely limited by overall market downside as the probability that tax reform can get done this year diminishes," she wrote.
Actually, Tenet rose 4.1% and HCA 0.8% Thursday, in a sign investors have doubts that Ryan's bill will pass. But banks were generally higher too, though well off session highs: Bank of America rose 0.6% and Goldman Sachs 0.4%. Wells Fargo fell 0.1%.
After the market close, the Congressional Budget Office released a score of the revised health care bill. The CBO still sees the legislation increasing the number of uninsured by 24 million. But it cut the bill's deficit savings by more than half to $150 billion, largely reflecting some tax and Medicaid changes.
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