NEW YORK: US stocks were lower in late morning trading on Thursday as investors assessed long-awaited tax-cut proposals unveiled by Republicans amid deep skepticism around the passing of the bill.
The proposals were largely in-line with expectations and called for slashing corporate tax rate to 20 percent from 35 percent and reducing the number of tax brackets for individuals.
The tax-cut package was one of President Donald Trump’s campaign promises that helped propel the markets to record highs since the November election.
“Even though I think there’s a lot of potentially positive developments in the tax plan, I don’t know if any actual substance that comes out of Washington can even live up to expectations already built into the market,” said Jake Dollarhide, CEO at Longbow Asset Management in Tulsa, Oklahoma.
Congress has not succeeded on comprehensive tax changes since 1986, when Republican Ronald Reagan was in the White House and Democrats controlled the House.
Investors are also waiting Trump’s announcement on the next Federal Reserve chair, scheduled at 3:00 p.m. ET (1900 GMT).
He is widely expected to nominate Fed Governor Jerome Powell from a list that includes current Fed Chair Janet Yellen, Stanford University economist John Taylor, former Fed Governor Kevin Warsh and White House economic adviser Gary Cohn.
Powell has broadly supported Yellen’s monetary policy, and is seen as more market-friendly.
At 11:32 a.m. ET, the Dow Jones Industrial Average was down 12.05 points, or 0.05 percent, at 23,422.96, the S&P 500 was down 7.26 points, or 0.28 percent, at 2,572.1.
The Nasdaq Composite was down 29.54 points, or 0.44 percent, at 6,686.99.
Eight of the 11 major S&P sectors were lower, with a 0.92 percent fall in consumer discretionary stocks leading the decliners.
A bunch of poor earnings also weighed on the market.
Tesla dipped 6.6 percent after the electric car maker pushed back its target for volume production on its new Model 3 sedan by about three months, and reported its biggest quarterly loss ever.
Newell Brands plunged more than 25 percent after the Sharpie maker cut its full-year profit forecast and reported results below expectations.
Facebook fell 2 percent and was the biggest drag on the S&P and the Nasdaq after the company warned of a surge in expenses next year.
Apple, which is set to report after market, was down marginally.
Time Warner slipped 5 percent after a report that the Department of Justice was considering seeking to block AT&T’s merger with Time Warner as it continues talks with the two companies.
Shares of US homebuilders tumbled after the release of the tax reform plan that would cap deductions for mortgages.
Toll Brothers, KB Home and Lennar were down between 5.9 percent and 2.8 percent. Home Depot was down 2.6 percent, while Lowe’s was off 4.6 percent.
Declining issues outnumbered advancers on the NYSE by 1,528 to 1,245. On the Nasdaq, 1,406 issues fell and 1,333 advanced.
Source: Brecorder.com
