You are here: Home » Reuters » News
Business Standard

Tech rally burns out, leaves Wall Street lower

Reuters 

By Noel Randewich

(Reuters) - fell on Tuesday as a technology rebound lost steam and Walt Disney Co dipped, while investors assessed how a Republican U.S. overhaul would impact corporate earnings.

The S&P 500 fell for a third straight session, a streak not seen since early August, trimming the index's rally this year to 17 percent.

Buoyed by a 2.53 percent increase in Electronic Arts Inc , the S&P 500 index <.SPLRCT> ended up 0.21 percent, but pared earlier gains of as much as 1.39 percent.

The year's top-performing sector was still down nearly 4 percent over the past week, with investors shifting money to banks, retailers and other seen as likely to benefit the most from cuts promised by U.S. President Donald Trump.

The bill passed on Saturday by Republican senators included a last-minute change retaining the corporate alternative minimum tax, or AMT, which had initially been removed.

That put Senate Republicans on a collision course with Republicans in the U.S. House of Representatives, whose own bill repealed the corporate AMT and who are already calling for the to be eliminated in the final legislation. Including the AMT could negate parts of the bill seen as beneficial to tech companies and other corporations.

"Sentiment still remains that reform will get done and we will get a 20 percent rate, and that will boost earnings significantly," said Lindsey Bell, an investment strategist at CFRA Research.

Such a rate cut could boost S&P 500 earnings next year by an extra 9 percent, Bell said.

All three major indexes moved sharply lower late in the session.

"You don't want things to slip away at the end of the year, so it's tempting to take things off the table, maybe buy something that's been beaten up," said Frank Gretz, a analyst for Wellington Shields & Co, a brokerage in New York.

The Dow Jones Industrial Average <.DJI> lost 0.45 percent to end at 24,180.64 points, while the S&P 500 <.SPX> ended down 0.37 percent at 2,629.57.

The Nasdaq Composite <.IXIC> dropped 0.19 percent to 6,762.21.

Ten of the 11 major S&P sectors fell, led by losses in telecom services <.SPLRCL> and utilities <.SPLRCU>.

of Twenty-First Century Fox slipped 0.30 percent after a report that Walt Disney was in the lead to acquire much of Fox's media empire, though rival suitor Comcast Corp remained in contention.

Disney fell 2.72 percent and Comcast slipped 1.98 percent.

McDonald's rose 1.37 percent, providing the biggest boost to the Dow, after Jefferies upgraded the stock to a "buy" rating.

Toll Brothers Inc fell 7.36 percent after the luxury homebuilder's profit and revenue missed analysts' expectations as it sold homes at prices lower than its own estimates.

Declining issues outnumbered advancing ones on the NYSE by a 1.80-to-1 ratio; on Nasdaq, a 1.83-to-1 ratio favoured decliners.

About 6.9 billion changed hands on U.S. exchanges, just above the 6.7 billion daily average for the past 20 trading days, according to Thomson data.

(Additional reporting by Rodrigo Campos in Bogota and Rama Venkat Raman and Sruthi Shankar in Bengaluru; Editing by Meredith Mazzilli)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, December 06 2017. 03:04 IST
RECOMMENDED FOR YOU