Steel makers, materials firms and other infrastructure-related stocks sold off Thursday on a report that President Trump could delay a big infrastructure spending bill until 2018.
Trump has vowed huge spending on roads, airports and other projects, lifting the likes of U.S. Steel (X), Martin Marietta (MLM), BHP Billiton (BHP) and Dow industrials component Caterpillar (CAT), as well as copper and iron prices.
But with a busy legislative agenda that includes corporate tax reform and ObamaCare repeal-and-replace, the Trump administration is mulling pushing infrastructure into 2018, Axios reported. One upside, GOP strategists say, is that debating the bill in the 2018 election year will make it easier to pass, as Democrats won't want to be seen opposing major projects and jobs in their districts and unions giving their support.
Passing an infrastructure bill in 2018 would likely mean that spending starts in 2019, ramping up over time. That's a long time for companies and investors to wait for a payoff.
U.S. Steel tumbled 7.85% on the stock market today, breaking below a recent buy point and approaching its 50-day line. Nucor (NUE) and Steel Dynamics (STLD) also sold off, dropping through their 50-day averages.
Martin Marietta sank 4.7% and Vulcan Materials (VMC) 3.15%, with the latter crashing below its 200-day moving average.
Caterpillar retreated 2.7%, finding support at its 50-day line. A big infrastructure-spending boost could fuel demand for its mining and heavy construction equipment.
Mining giant BHP Billiton lost 1.8%, also closing just above its 50-day line. Copper and iron ore prices retreated Thursday.
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