Wall St slips as investors digest tax bill outline

A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. — Reuters pic
A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. — Reuters pic

NEW YORK, Nov 2 — US stocks slipped in late morning trading today as investors digested a summary of the much-awaited Republican tax-cut bill that called for a range of changes to the tax code.

The bill suggested slashing corporate tax rate to 20 per cent from 35 per cent and reducing the number of tax brackets for individuals, according to the summary document obtained by Reuters.

The tax bill would be made public at 11.15am ET (1515 GMT/10.15pm Malaysian time), according to a spokesman for House Speaker Paul Ryan.

“The idea of this plan getting approved is still a long shot,” said Phil Blancato, CEO of Ladenberg Thalmann Asset Management in New York.

“I don’t think the market or most economists think they can get this done. There’s just not enough consensus in the House to move this forward.”

Congress has not succeeded on comprehensive tax changes since 1986, when Republican Ronald Reagan was in the White House and Democrats controlled the House.

President Donald Trump’s campaign promises of tax cuts, higher infrastructure spending and deregulation have helped the S&P gain 20.4 per cent since the election.

At 10.42am ET, the Dow Jones Industrial Average was down 1.3 points, or 0.01 per cent, at 23,433.71, the S&P 500 was down 5.4 points, or 0.20 per cent, at 2,573.96.

The Nasdaq Composite was down 9.23 points, or 0.14 per cent, at 6,707.30.

Nine of the 11 major S&P sectors were lower, with the consumer discretionary sector’s 0.69 per cent loss leading the decliners.

Investors are also awaiting Trump’s announcement on the next Federal Reserve chair.

Trump 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 in recent years has shared her concern that low inflation justified continuing with a cautious approach to raising interest rates.

Trump will announce his choice at 3pm ET (1900 GMT) at the White House, according to his public schedule.

Facebook fell 2.4 per cent and was the biggest drag on the S&P and the Nasdaq after the company warned of a surge in expenses next year.

Tesla dipped 7.1 per cent 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 21 per cent after the Sharpie maker cut its full-year profit forecast and reported results below expectations.

Declining issues outnumbered advancers on the NYSE by 1,422 to 1,303. On the Nasdaq, 1,422 issues rose and 1,236 fell. — Reuters

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