Wall Street slips on worries over tax plan's progress

By Sruthi Shankar

(Reuters) - Wall Street indexes were under pressure on Friday as investors were skeptical about the Republicans' efforts to pass the tax bill.

The House of Representatives took important steps on Thursday toward the biggest U.S. tax-code overhaul since the 1980s, approving a broad package of cuts, while a Senate panel advanced its own version of the legislation.

Tax debate shifts to the Senate, where the plan has already faced resistance and the Republican majority is much slimmer.

"The market is still kind of nervous with respect to the tax bill moving to the next stage," said Massud Ghaussy, director at Nasdaq Advisory Services.

"The GOP can afford only two defections and they are not expecting any Democrats to vote for it."

A Reuters poll showed that nearly two-thirds of the more than 60 economists interviewed did not see the Republicans pushing major tax cuts through Congress this year.

At 12:30 p.m. ET (1630 GMT), the Dow Jones Industrial Average was down 81.71 points, or 0.35 percent, at 23,376.65, the S&P 500 was down 2.57 points, or 0.10 percent, at 2,583.07 and the Nasdaq Composite was up 3.08 points, or 0.05 percent, at 6,796.37.

Strong earnings and good economic data have underpinned much of the rally this year. The S&P 500 has risen about 15 percent this year, its biggest gain in four years.

"We've been seeing a decent run-up in stocks recently, and it's just wobbly couple of days," Ghaussy said.

The technology index weighed the most on the S&P 500, falling 0.46 percent.

Shares of Twenty-First Century Fox rose 3.82 percent after sources said Comcast and Verizon had expressed interest in acquiring a significant part of the company's assets.

Abercrombie & Fitch jumped 24 percent and Gap rose about 6 percent after the apparel retailers reported results that beat estimates.

Those, along with a surge for sports retailers including Foot Locker, Shoe Carnival and Hibbett Sports and Nike were the latest signs of a revival of fortunes in a battered U.S. retail sector.

Advancing issues outnumbered decliners on the NYSE by 1,847 to 954. On the Nasdaq, 1,739 issues rose and 1,102 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)