Tax bill status helps drive stocks lower
Health care companies and banks drove U.S. stocks lower Thursday, pulling major indexes below their recent highs.
The afternoon slide, which erased gains from earlier in the day, came on news that some Republican senators’ support for the GOP’s proposed tax overhaul bill was faltering.
Small-company stocks, which would be among the biggest beneficiaries of the bill’s reduction of corporate income tax rates, declined more than the rest of the market.
“The market is focused almost completely on the corporate tax reduction,” said Quincy Krosby, chief market strategist at Prudential Financial. “And there are still concerns that some of the key Republican senators are wavering.”
The losses outweighed gains among retailers, which got a boost from a government report showing that retail sales jumped in November.
The Standard & Poor’s 500 index fell 10.84 points, or 0.4 percent, to 2,652.01. The Dow Jones industrial average lost 76.77 points, or 0.3 percent, to 24,508.66. The Nasdaq shed 19.27 points, or 0.3 percent, to 6,856.53. The Russell 2000 index of smaller-company stocks gave up 17.50 points, or 1.2 percent, to 1,506.95.
Despite the declines, the indexes are all on track to finish the week with a gain.
Sen. Marco Rubio, RFla., said Thursday he will vote against the proposed tax bill unless negotiators expand its child tax credit. The bill would increase the child tax credit to $2,000 from $1,000, but Mr. Rubio wants more. Meanwhile, a spokesman for Sen. Mike Lee, R-Utah, said the senator is undecided on the bill.
House and Senate leaders agreed on the bill in principle on Wednesday, but were still finalizing the legislation, which they plan to unveil Friday and then move it through the Senate next week.
The stock indexes had been moving higher earlier in the day after the Commerce Department said that sales at retailers and restaurants jumped 0.8 percent last month. Sales in a category that mostly includes online shopping jumped 2.5 percent, while sales at electronics stores rose 2.1 percent.