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Stock Market News for April 27, 2017

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Benchmarks finished in the red on Wednesday, following the release of Donald Trump's outline for tax reform. Investors were disappointed as they had expected some more details about the tax-reform package. Meanwhile, market watchers kept a close watch on quarterly earnings results.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) declined 0.1% to close at 20,975.09. The S&P 500 fell 0.1% to close at 2,387.45. The tech-laden Nasdaq Composite Index declined 0.27 points to close at 6,025.23. The fear-gauge CBOE Volatility Index (VIX) declined 0.1% to 10.74. A total of around 4.1 billion shares were traded in NYSE on Wednesday. Advancers outpaced declining stocks on the NYSE. For 55% stocks that advanced, 41% declined.     

Tax Reform Outline

On Wednesday, the Trump administration unveiled a single page outline for tax-reform plan at a press conference. Steven Mnuchin and Gary Cohn rolled out the outline of White House’s tax-reform plan which included reduction of individual and corporate rates and simplification of the tax code. The plan promised to slash the top income tax rate from 39.6% to 35%. According to the plan, the number of personal income tax brackets would be reduced from seven to three. The new tax rates are expected to be 10%, 25% and 35%.  

The plan proposed to double standard deduction for a married couple from $12,700 to approximately $24,000, enabling taxpayers to retain more of their income. As per the proposal, tax breaks for individuals and married couples filing separately is expected to rise from $6,300 to $12,600. The plan promised to reduce other deductions including state and local tax payments used by wealthy Americans. The administration also proposed to reduce the corporate tax rate from 35% to 15% along with repealing the estate tax.

However, investors had expected more details about the proposed tax-reform package from Trump administration. Meanwhile, investors remained focused on the outcome of the U.S. tax-reform plan, expected to relieve individuals and businesses from tax and regulatory burdens.

Earnings Results

Procter & Gamble Co (PG - Free Report) released third-quarter fiscal 2017 financial results, wherein earnings exceeded expectations, while revenues missed the same.Procter & Gamble reported net sales of $15.61 billion which missed the Zacks Consensus Estimate of $15.71 billion. However, the company’s fiscal third-quarter adjusted earnings of $0.96 per share beat the Zacks Consensus Estimate of $0.94. The company’s results were affected by market slowdown, continued geopolitical disruptions and foreign exchange challenges. Shares of the company fell 2.5%.

Shares of Boeing Co (BA - Free Report) declined 1% following the release of its first-quarter 2017 financial results. The company reported revenues of $20.98 billion, missing the Zacks Consensus Estimate of $21.44 billion by 2.1%. However, the company reported adjusted earnings of $2.01 per share in the reported quarter, beating the Zacks Consensus Estimate of $1.91 by 5.2%.

Both, Procter & Gamble and Boeing emerged as the leading decliners for the Dow.

Although, PepsiCo, Inc (PEP - Free Report) reported better-than-expected results in first-quarter 2017, with both earnings and revenues beating the Zacks Consensus Estimate, the company’s shares declined 0.7% as its first-quarter gross margins contracted 45 basis points to 55.97%. Margins were adversely affected by the company's decision to pass on commodity prices to customers in developing markets in a faltered manner. However, PepsiCo’s first-quarter core earnings per share of $0.94 beat the Zacks Consensus Estimate of $0.91. The company reported revenues of $12.05 billion, surpassing the Zacks Consensus Estimate of $11.97 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks that made Headlines

Citrix Systems Beats on Earnings & Revenues in Q1

Citrix Systems Inc. posted better-than-expected earnings and revenues in the first quarter of 2017. (Read More)

Boston Beer Beats on Q1 Earnings, 2017 View Intact

Boston Beer Co. Inc. (SAM - Free Report)    reported robust first-quarter 2017 earnings, wherein the bottom line topped estimates. (Read More)

BCE Inc. Surpasses Q1 Earnings and Revenue Estimates

Leading Canadian telecom operator, BCE Inc. (BCE - Free Report) reported strong financial results in the first quarter of 2017. (Read More)

Nokia Misses Earnings and Revenue Estimates in Q1

Nokia Corporation’s (NOK - Free Report) first-quarter 2017 earnings per share of €0.03 (approximately 3 cents) missed the Zacks Consensus Estimate of 4 cents. (Read More)

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