Industrial and tech stocks fall on potential tax cut delay
Stocks skidded Thursday after Senate Republicans surprised Wall Street by proposing a delay in cutting corporate taxes.
Industrial and technology companies fell the most. Stocks recovered some of their losses before the closing bell.
Senate Republicans introduced a tax bill a week after their House counterparts did the same. While both bills would ultimately reduce the corporate tax rate to 20 percent from 35 percent, the Senate legislation doesn’t do that until 2019.
However the worst results Thursday came not from the smaller, U.S.-focused companies that might benefit the most from a domestic tax cut, but from larger multi-national companies like industrial and technology firms and basic materials makers.
“Most investors knew there was uncertainty about the specific provisions, but thought that the House and the Senate would at least agree there would be some kind of cut in corporate tax rates in 2018,” said Kate Warne, an investment strategist at Edward Jones.
The Standard & Poor’s 500 index dropped 9.76 points, or 0.4 percent, to 2,584.62. The Dow Jones industrial average fell 101.42 points, or 0.4 percent, to 23,461.94. The Nasdaq composite slid 39.07 points, or 0.6 percent, to 6,750.05. Each closed at an all-time high on Wednesday. The Russell 2000 index of smaller-company stocks fell 6.71 points, or 0.5 percent, to 1,475.02, its lowest level since late September.