Benchmarks ended in the red on Friday even as investors remained skeptical over the likelihood of the tax cuts legislation gaining passage as early as this year-end. Concerns over tax overhaul plans also weighed on investor sentiment over last week, with both the Dow and the S&P 500 posted second consecutive weeks of declines.
The Dow Jones Industrial Average (DJIA) decreased 0.4%, or 100.12 points, to close at 23,358.24. The S&P 500 Index (INX) fell 0.3% to close at 2,578.85. The tech-laden Nasdaq Composite Index (IXIC) closed at 6,782.79, losing 0.2%. A total of 6.3 billion shares were traded on Friday, lower than the last 20-session average of 6.8 billion shares. Advancers outnumbered decliners on the NYSE by a 1.83-to-1 ratio. On Nasdaq, a 1.50-to-1 ratio favored advancing issues. The CBOE VIX decreased 2.8% to close at 11.43.
Tax Reform Woes Weighed on Markets
On Thursday, House of Representatives finally passed the much awaited tax cuts legislation now named as the Tax Cuts and Jobs Act. This takes President Trump and his team one step closer toward realizing their most important agenda — tax reforms.
However, investors remained cynical over the Trump administration’s ability to pass the bill in the Senate by the end of this year. This was mainly because Senate’s version of the tax plan was quite different from that of the House panel's in several ways. Unlike the House Republicans’ tax proposals which focus on reducing corporate tax rate from 35% to 20% by end of 2017, the Senate version supports a similar tax cut but not before 2019.
Along with the tax cut woes, news of a probe into Russia’s interference in 2016 U.S. election also weighed on key U.S. indexes. Special counsel Robert Mueller and his team had reportedly issued a subpoena mid-October to several top officials involved with Trump’s election campaign to submit all Russia-related documents.
Following these developments, out of the 11 key S&P 500 sectors 7 declined on Friday, with utilities and technology sectors emerging as the worst performers. Utilities Select Sector SPDR (XLU) and Technology Select Sector SPDR (XLK) fell 0.7% and 0.6%, respectively.
Key Earnings for the Day
On the earnings front, shares of Foot Locker, Inc. (FL - Free Report) jumped 28.2% after reporting fiscal third-quarter adjusted earnings per share of 87 cents and revenues of $1,870 million, beating the respective Zacks Consensus Estimate. It was the best gainer among the S&P 500 companies. Foot Locker has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Made Headlines
Will There Be a Bidding War for 21st Century Fox's Major Assets?
Media and cable giant Comcast (CMCSA - Free Report) reportedly approached 21st Century Fox (FOXA - Free Report) about potentially acquiring a good portion of its assets. (Read More)
Statoil Plans to Boost Exploration Activities in NCS
Statoil ASA (STO - Free Report) has decided to accelerate oil and gas exploration activities in the Norwegian Continental Shelf (NCS) in 2018. (Read More)
Hawaiian Holdings Arm to Bid CEO Dunkerley Adieu Next March
Hawaiian Holdings, Inc.’s (HA - Free Report) wholly-owned subsidiary, Hawaiian Airlines, recently announced that its CEO Mark Dunkerley will retire in March 2018. (Read More)
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius. Click for details >>