MARKET SNAPSHOT: Stock Market Edges Lower, On Track For Weekly Losses

By Barbara Kollmeyer and Anora Mahmudova, MarketWatch Features Dow Jones Newswires

Defeat for 'skinny' repeal of 'Obamacare' in Senate casts doubt on Trump plans

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U.S. stocks traded slightly lower on Friday, weighed down by slumping Amazon.com shares following disappointing earnings while the main indexes were on track to finish the week with modest losses.

The failure of a Republican-led attempt to repeal or replace the Affordable Care Act in the wee hours of Friday morning (http://www.marketwatch.com/story/senate-votes-against-skinny-bill-to-repeal-obamacare-2017-07-28)--viewed as a proxy for President Donald Trump's ability to deliver on previously pledged pro-growth legislations--dampened investor sentiment, some analysts said.

The S&P 500 index was off by 6 points, or 0.2%, to 2,469, with eight of its main sectors trading in negative territory.

Less than spectacular corporate results from Amazon.com Inc.(AMZN), which reported a 77% plunge in second-quarter earnings (http://www.marketwatch.com/story/amazon-earnings-fall-77-shares-drop-2017-07-27) added to a recent pause in the market's gains, as Wall Street reassesses valuations of Wall Street's highest fliers, which have helped equity benchmarks notch repeated records. Amazon shares dropped 3.6%.

The consumer discretionary sector led the losses, down 1%.

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"While Amazon's results may only be responsible for some short term negativity, with the tech sector as a whole is still enjoying a remarkable year, the failure in the Senate could pose further problems for President Donald Trump and his growth agenda," said Craig Erlam, senior market analyst at OANDA in a note.

The Dow Jones Industrial Average , which briefly touched an all-time high shortly after the opening bell, was 18 points, or 0.1%, lower at 21,780. Shares of Dow-component Exxon Mobil Corp., (XOM) were down 2.5% after reporting disappointing second-quarter results.

The Nasdaq Composite Index declined 16 points, or 0.3%, to 6,365.

Read:Amazon's free-spending ways hit earnings, but don't expect a shift to thrift (http://www.marketwatch.com/story/amazons-free-spending-ways-hit-earnings-but-dont-expect-a-shift-to-thrift-2017-07-27)

Some analysts suggested that any pullback in highflying FAANG stocks--Facebook Inc, Amazon.com, Apple Inc., Netflix Inc. and Google Inc., which had been trading at high valuations, may impact broader markets.

"If they lose momentum, something that is quite possible at any moment in time, which sectors are going to take over? In a market at record highs with P/E ratios the highest in a decade, that is a tough question to answer," said James M. Meyer, chief investment officer at TowerBridge Advisors.

Trump setback: Investors have been watching the U.S. political landscape closely for clues to whether U.S. Trump will ultimately be able to push through his tax cuts and stimulus packages. These are seen as potentially giving a boost to the U.S. economy. Analysts said the latest failure doesn't bode well for those economic ambitions.

Economic docket: On the data front, a second-quarter reading on gross domestic product rose 2.6%, below the 2.8% expected by economists polled by MarketWatch. First-quarter GDP growth was revised to 1.2% from 1.4%.

The cost of employing the average U.S. worker rose 0.5% in the second quarter but showed little acceleration despite the tightest labor market in years.

Market reaction to economic data was largely muted.

Stocks to watch: Shares of Starbucks Corp.(SBUX) fell nearly 7%. The company posted earnings above expectations and rising global sales (http://www.marketwatch.com/story/starbucks-adj-earnings-above-expectations-teavana-stores-to-close-2017-07-27). (http://www.marketwatch.com/story/starbucks-adj-earnings-above-expectations-teavana-stores-to-close-2017-07-27) The coffee giant said it would close all of its Teavaa retail stores over the coming year.

Expedia Inc. shares (EXPE) were up 1.2% after a revenue beat (http://www.marketwatch.com/story/expedia-shares-climb-after-second-quarter-revenue-beat-2017-07-27). Merck & Co. Inc.(MRK) shares rose after the drug company reported quarterly results (http://www.marketwatch.com/story/merck-profit-and-sales-rise-beat-expectations-amid-big-jump-in-keytruda-sales-2017-07-28).

Other markets: European stocks dropped to three-month lows (http://www.marketwatch.com/story/european-stocks-sell-off-as-ubs-fall-tech-worries-weigh-2017-07-28) as Swiss bank UBS Group AG fell on results. and Asian stocks (http://www.marketwatch.com/story/asian-stocks-tumble-on-heels-of-us-tech-selloff-2017-07-28) mostly fell Friday on the heels of that slump for U.S. tech stocks.

The dollar was back under pressure after the Senate health care vote and weaker-than-expected GDP numbers, with the ICE Dollar Index down 0.4% to 93.54.

Gold prices rebounded, while oil prices were slightly higher.

(END) Dow Jones Newswires

July 28, 2017 10:06 ET (14:06 GMT)