Stocks chill on willies over tax bill

US stocks fell on Tuesday as excitement over the likelihood of a tax code revamp was offset by concern over its effect on years of monetary policy stimulus and the future of interest rates.

The House of Representatives approved the tax legislation in an afternoon vote — but because of a procedural issue in the Senate the lower body will have to vote again, most likely on Wednesday afternoon.

Republicans were confident of the bill being signed into law by the end of the week.

Stocks added to losses after the vote, which followed weeks of market gains on optimism that tax cuts would boost earnings and the economy.

The S&P 500 has climbed about 5 percent since mid-November, when the House passed its tax overhaul legislation.

“The tax rate we’ve certainly priced in [in stocks],” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. Investors may also be “celebrating the tax package but recognizing that what central banks have given us in the last years they could begin to take away.”

The bill, among other things, proposes lowering corporate tax rates to 21 percent from 35 percent, which investors are betting will boost profits as well as trigger share buybacks and higher dividend payouts.

The S&P 500 technology sector fell 0.5 percent, with tech stocks weighing the most on the major indexes.

The Dow Jones industrial average fell 37.45 points, to 24,754.75, and the Nasdaq Composite dropped 30.91 points, to 6,963.85.

Earlier in the day, stocks were pushed lower as Treasury yields rose on strong housing data. Domestic home construction hit a 13-month high in November.