FINANCIAL MARKETS
NEW YORK—U.S. stocks skidded Thursday after Senate Republicans surprised Wall Street by proposing a delay in cutting corporate taxes. Industrial and technology companies fell the most, but stocks regained 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.
Industrial companies had their worst day in almost three months. Weak reports from aircraft parts maker TransDigm and medical waste processor Stericycle were partly to blame, while a weak forecast from Johnson Controls also hurt the sector. Media companies traded higher after a solid report from Twenty-First Century Fox and energy companies also rose. At midday stocks were on track for their biggest loss in months, as the Dow Jones industrial average fell as much as 253 points, but they made up some of that ground in the afternoon.
The stock sectors that fell Thursday include some of the best-performing stocks on the market this year, and investors reacted to the potentially delayed tax cut by taking some profits. 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.
Twenty-First Century Fox posted a bigger profit and more revenue than investors expected. Analysts said its cable networks did well, and it didn’t lose subscribers the way some of its competitors have done recently. Its stock added 61 cents, or 2.2 percent, to $28.70 and cable provider Comcast gained 35 cents, or 1 percent, to $36.56. Walt Disney, which was reported this week to have spoken to Fox about buying most of its entertainment assets, added $1.50, or 1.5 percent, to $102.68. Benchmark U.S. crude gained 36 cents to $57.17 a barrel in the New York. This week oil has been trading at its highest prices since the middle of 2015. Brent crude, used to price international oils, added 44 cents to $63.93 a barrel in London.
Wholesale gasoline held steady at $1.82 a gallon. Heating oil rose 3 cents to $1.95 a gallon. Natural gas climbed 3 cents to $3.20 per 1,000 cubic feet.