Stocks hold steady as GOP tax bill goes to president

U.S. stocks bounced around Wednesday and finished little changed after Congress passed the Republican-sponsored tax bill.

Smaller companies fared the best. Bond yields rose, which hurt companies that pay big dividends, including utilities and makers of household goods.

Stocks have jumped over the last four weeks as the tax legislation moved closer to passage, but they haven’t done much in the last two days as Congress voted on the bill. Stocks set all-time highs Monday and slipped Tuesday.

It has been a very strong year for the market, and ordinarily investors might sell some of their holdings in late December and take some profits before they make new investments in January. But with a tax bill passing at the very end of the year, TD Ameritrade Chief Market Strategist JJ Kinahan said, that pattern might not hold.

“This could be a year where you see the selling pressure at the beginning of the year because people are delaying their selling, waiting for a better tax environment,” he said. “There are always unintended consequences with tax plans.”

In a note this week, after the bill was largely complete, Barclays analyst Maneesh Deshpande said household goods companies, banks and industrial companies will get the largest tax cuts, while technology and healthcare companies won’t see much of a difference.

FedEx shares climbed 3.5% to $251.07 on Wednesday after the delivery company said its holiday season is off to a strong start and raised its annual profit forecast. It also said the tax bill could boost its profit this year by $4.40 to $4.50 a share because of changes in its deferred tax liabilities as well as a reduced tax rate.

AT&T said it will pay a $1,000 bonus to 200,000 of its U.S. employees as the bill passed. The company said last month that it would invest $1 billion domestically if the measure was adopted. On Wednesday, its stock rose 1.3% to $38.55.

Bond prices fell further. The yield on the 10-year Treasury note rose to a ninemonth high of 2.49% from 2.46%. When yields rise, it’s good for banks because they can charge higher interest rates on mortgages and other kinds of loans.

Energy firms climbed with oil prices. Benchmark U.S. crude rose 53 cents to $58.09 a barrel. Brent crude, used to price international oils, climbed 76 cents, or 1.2%, to $64.56 a barrel.

Wholesale gasoline rose 4 cents to $1.74 a gallon. Heating oil stayed at $1.94 a gallon. Natural gas fell 6 cents to $2.64 per 1,000 cubic foot.

Stitch Fix dived 9.8% to $22.34 after the clothing styling service reported its results for the first time since it went public in November. Stitch Fix did about as well as investors expected, but it said its profit margins decreased because of its newer men’s and plussize clothes. Shipping costs increased.

Philip Morris International fell 2.5% to $104.37 after Reuters reported that some of the employees who have worked on clinical studies of the company’s iQOS device, which heats tobacco without burning it, have questions about the quality of that research. The company has spent years working on iQOS and asked the Food and Drug Administration to approve it based in part on those trials.

Gold rose $5.40 to $1,269.60 an ounce. Silver rose 12 cents to $16.28 an ounce. Copper rose 4 cents to $3.20 a pound.

Bitcoin futures turned sharply lower. On the Chicago Mercantile Exchange, the price dropped $1,425, or 7.8%, to $16,775.

The dollar rose to 113.42 yen from 112.94 yen. The euro rose to $1.1879 from $1.1845.