Wall Street drifts after tax cut plan unveiled

By Lewis Krauskopf

(Reuters) - The S&P 500 and the Nasdaq moved modestly lower on Thursday as shares of Facebook Inc dragged, while the Dow industrials edged higher as investors assessed the long-awaited tax cut plan unveiled by U.S. President Donald Trump's fellow Republicans.

The bill called for slashing the corporate tax rate to 20 percent from 35 percent but also ending certain tax breaks for companies and individuals.

While many market watchers have pointed to a corporate tax cut as further fuel for a record-setting run for equities, investors said the bill was just a starting point with significant negotiations likely ahead.

"The message from the market is there are still a lot of unknowns out there," said William Delwiche, investment strategist at Baird in Milwaukee. "It's kind of hard to draw too many conclusions at this point from what exactly the bill will end up being."

The Dow Jones Industrial Average rose 29.95 points, or 0.13 percent, to 23,464.96, the S&P 500 lost 2.59 points, or 0.10 percent, to 2,576.77 and the Nasdaq Composite dropped 7.23 points, or 0.11 percent, to 6,709.30.

The U.S. housing sector tumbled amid concerns over the tax plan's cap on deductions for mortgages.

The PHLX Housing index <.HGX> fell 0.9 percent, with Toll Brothers down 5.5 percent and MDC Holdings off 10.1 percent.

Shares of home improvement retailers also fell. Lowe's dropped 3.3 percent and Home Depot fell 1.7 percent, weighing on the Dow.

Investors were also awaiting Trump's official announcement of his pick for the next Federal Reserve chair. Trump is widely expected to nominate Fed Governor Jerome Powell, who has supported current Chair Janet Yellen's general direction in setting monetary policy.

Third-quarter earnings season was also in focus, with investors citing corporate profit growth as supporting the market's rally in 2017.

With more than three-fourths having reported, S&P 500 companies are expected to have increased profits by 7.7 percent in the third quarter, up from an expectation of 5.9 percent growth at the start of October, according to Thomson Reuters I/B/E/S.

Facebook shares fell 2.1 percent as investors shrugged off strong quarterly results and worried about the social media company's spending. The stock was the biggest drag on the S&P 500 and Nasdaq.

Tesla Inc shares dropped 7.2 percent after the carmaker pushed back its production target for its Model 3 sedan and reported its biggest quarterly loss ever.

Blue Apron shares tumbled 18.8 percent after the meal-kit delivery company reported a bigger quarterly loss than expected.

Declining issues outnumbered advancing ones on the NYSE by a 1.18-to-1 ratio; on Nasdaq, a 1.11-to-1 ratio favoured advancers.

(Additional reporting by Sruthi Shankar and Tanya Agrawal in Bengaluru; Editing by Sriraj Kalluvila and Meredith Mazzilli)