Wall Street slips on tax plan uncertainty, GE losses
Bengaluru: US stocks were lower in morning trading on Monday as uncertainty over a U.S. tax reform deal and GE’s dismal outlook hit investor sentiment.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 8, 2017. REUTERS/Brendan McDermid
General Electric (GE.N) fell 3.5 percent after the industrial conglomerate cut its 2018 profit forecast, slashed dividend and unveiled a restructuring plan. The stock weighed the most on the S&P 500 index.
The S&P and the Dow ended the week lower for the first time in nine weeks on Friday after Senate Republicans unveiled a new tax plan that differed from the House of Representatives’ version.
Hopes of lower taxes, one of President Donald Trump’s main campaign promises, have helped drive the S&P 500 up 20 percent since the 2016 presidential election.
“We’re entering a period of uncertainty, until the tax bill is either passed or till we have more details,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
“Any disappointment on corporate tax deductions will probably set the stage for the market to pull back.”
With third-quarter earnings season on its last leg, investors are closely tracking developments around the tax bill as well as economic data to make their bets.
With the Federal Reserve’s policy meeting a month away, Philadelphia Fed President Patrick Harker said that he expected to back an interest rate hike next month despite caution over low inflation.
Harker said he expected the Fed to raise rates three times next year as long as inflation remains on track.
At 9:38 a.m. ET (1338 GMT), the Dow Jones Industrial Average .DJI was down 53.56 points, or 0.23 percent, at 23,368.65, the S&P 500 .SPX was down 6.81 points, or 0.26 percent, at 2,575.49 and the Nasdaq Composite .IXIC was down 25.10 points, or 0.37 percent, at 6,725.84.
Nine of the 11 major S&P indexes were lower, led by industrial .SPLRCI and financial .SPSY stocks.
Toymaker Mattel (MAT.O) jumped about 20 percent after a report that rival Hasbro (HAS.O) has made an approach to acquire the company. Hasbro rose 5.7 percent.
JD.com (JD.O) rose nearly 6 percent as China’s second largest e-commerce firm reported revenue that beat estimates, as the firm attracted more shoppers.
Qualcomm (QCOM.O) rose 1.33 percent after the chipmaker rejected rival Broadcom’s (AVGO.O) $103-billion takeover bid, saying the offer “dramatically” undervalued the company. Broadcom fell 1 percent.
Declining issues outnumbered advancers on the NYSE by 1,806 to 747. On the Nasdaq, 1,788 issues fell and 655 advanced.