NEW YORK, Nov 11 ― Wall Street ended marginally lower yesterday, with losses in Intel and Apple as investors worried about the future of promised corporate tax cuts following dueling plans unveiled by Republican lawmakers.
The S&P 500 and the Dow Jones Industrial Average ended the week lower for the first time in nine weeks.
US Senate Republicans released a tax plan on Thursday that differed from a version put forth by the House of Representatives on several key fronts, including putting off corporate tax cuts for a year.
Expectations of lower taxes, one of President Donald Trump's key campaign promises, have helped drive the S&P 500 up 20 per cent since the 2016 presidential election.
Failure to cut corporate taxes would increase concerns about Trump's ability to pass legislation and could shake markets that have been banking on lower tax rates to boost company earnings.
The S&P 500 yesterday stood at 18.1 times expected earnings, the highest since 2004, according to Thomson Reuters Datastream.
Arrow Funds Director of Research John Serrapere put the chances of successfully passing meaningful tax cuts at 50 per cent, and he warned that failing could trigger a correction of as much as 15 per cent in stocks.
“There's not a lot of confidence. I'm not pessimistic, but there are a lot of pieces that need to be put together,” Serrapere said.
The Dow fell 0.17 per cent to end at 23,422.21, while the S&P 500 slipped 0.09 per cent to 2,582.3.
The Nasdaq Composite edged up 0.01 per cent to 6,750.94.
For the week, the Dow lost 0.5 per cent and the S&P 500 slipped 0.21 per cent. The Nasdaq gave up 0.2 per cent for the week, snapping six weeks of weekly gains.
Intel fell 1.55 per cent and Apple lost 0.33 per cent, both accounting more than any other companies for the S&P 500's decline.
Seven of the 11 major S&P sectors fell, with the energy index's 0.81 per cent dip leading the decliners as oil prices fell.
Nvidia jumped 5.27 per cent and hit a record high after the chipmaker's revenue forecast for the current quarter topped estimates.
A rise in media stocks also helped limit the slide.
Disney rose 2.05 per cent as the promise of a new Star Wars trilogy overshadowed its weak quarterly results.
Time Warner Inc jumped 4.08 per cent while News Corp climbed 5.15 per cent.
Declining issues outnumbered advancing ones on the NYSE by a 1.31-to-1 ratio; on Nasdaq, a 1.08-to-1 ratio favoured advancers.
About 6.4 billion shares changed hands on US exchanges, below the 6.6 billion daily average over the last 20 sessions. ― Reuters