U.S. Stocks Slip as House Gives Final Approval of Tax Bill
U.S. stocks headed for a second day of losses Wednesday, as investors shrugged off Congress’ final approval of new tax legislation.
Stocks Struggle for Momentum
Equities declined for a second straight session, with the S&P 500 and Dow Jones Industrial Average finishing slightly lower.
The S&P 500 ended down 0.1% at 2,679.25, with six of 11 sectors finishing in negative territory. Utilities stocks were among the hardest hit, falling 0.8% as a sector. Consumer staples ended down 0.5%.
Losses in these sectors offset brisk gains in energy and telecommunication services, which rose 1.4% and 0.6%, respectively.
The Dow finished 0.1% lower at 24,726.65. Meanwhile, the technology-heavy Nasdaq Composite Index pared losses to finish relatively flat at 6,960.96.
A measure of 30-day volatility known as the CBOE VIX declined for the first time in three days. The so-called “fear index” fell 3.1% to close at 9.72. Vol briefly fell below 9.00 in intraday trade, which put it on course for one of its lowest settlements ever.
GOP Celebrates Tax Reform
The Trump administration is celebrating its largest legislative achievement after the House of Representatives gave final approval Wednesday of a new tax bill. The Tax Cuts And Jobs Act introduces sweeping changes to the tax law, including a sharp reduction in corporate taxes and a deduction to many pass-through businesses.
The tax bill was approved by the House for a second time in a vote of 224-201. No Democrats backed the bill.
Earlier in the day, the bill was approved by the Senate in a party-line vote of 51-48.
GOP lawmakers joined President Trump at the White House Wednesday afternoon to celebrate the new legislative achievement.
“It’s always a lot of fun when you win,” Trump said at the ceremony on the White House lawn. “It’s really — it’s simple. When you think you haven’t heard this expression — we are making America great again,” he said.
On the data front, U.S. existing home sales shot up more than expected last month, a sign that a robust labor market was boosting demand for real estate.
The National Association of Realtors (NAR) reported Wednesday that existing home sales rose 5.6% in November to a seasonally adjusted 5.81 million units. That was well above forecasts calling for a 0.9% increase and the highest level in over a decade.
Lawrence Yun, NAR chief economist, said the gains were largely attributed to “faster economic growth in recent quarters, the booming stock market and continuous job gains.”
On Thursday, the Commerce Department will issue revised Q3 GDP numbers. The report is expected to once again show annualized growth of 3.3% in July-September, confirming the fastest expansion in three years.
Friday is the most active session from a data perspective, with reports on durable goods orders and personal spending set for release.
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