Real estate and utilities led the decliners
US stocks ended little lower on Wednesday, 20 December 2017. U.S. equities ticked lower on Wednesday as investors contemplated their next move following the passage of tax reform. All three indices each finished a tick below their flat lines.
The Dow Jones Industrial Average which was up as much as 80 points shortly after the open, ended the session down 28.1 points, or 0.1%, at 24,726.65. The S&P 500 closed 2.22 points lower at 2,679.25, a loss of less than 0.1%, with seven of the 11 main sector finishing in negative territory. The Nasdaq Composite Index closed 2.89 points lower at 6,960.96.
Real estate and utilities led the decliners. Meanwhile, gains in energy, telecoms and industrials offset those losses.
The Senate passed the GOP's tax reform bill shortly after midnight, giving equities a boost at Wednesday's opening bell. However, the early gains didn't last for long as the technology sector began trending downwards.
Congress came back into focus in the early afternoon as the House of Representatives took up tax reform, once again, as procedural rules in the Senate forced minor changes to the bill, nullifying yesterday's passage in the House. The measure was approved, as expected, sending the bill to the White House for a final endorsement.
In the bond market, U.S. Treasuries finished mostly lower in a curve-steepening trade that pushed the 2yr-10yr spread higher by five basis points. The yield on the benchmark 10-yr Treasury note climbed four basis points to 2.50%, which marks a nine-month high, while the 2-yr yield slipped one basis point to 1.85%.
Reviewing Wednesday's economic data, which included November Existing Home Sales and the weekly MBA Mortgage Applications Index, existing home sales increased 5.6% in November to an annualized rate of 5.81 million units (consensus 5.56 million). The October reading was revised to 5.50 million from 5.48 million. The key takeaway from the report is that notable supply constraints remain, which will continue to act as a drag on overall sales due to the limited inventory and the high prices on available inventory that is crimping affordability, particularly for first-time buyers.
Separately, the weekly MBA Mortgage Applications Index decreased 4.9% to follow last week's 2.3% decline.
The ICE Dollar Index slipped 0.2% to 93.289 on Wednesday. The yield on the 10-year U.S. Treasury note meanwhile, continued to rise, trading above 2.49%.
Bullion prices ended moderately higher at Comex on Wednesday, 20 December 2017. Gold ended with a modest gain on Wednesday, notching its fifth daily rise in six sessions, with the dollar softening as lawmakers approved a sweeping tax overhaul. The yellow metal climbed as stocks struggled for direction, following a series of records in anticipation of the passage of the bill, which includes massive corporate tax cuts.
February gold, the most active contract on Comex, rose $5.40, or 0.4%, to settle at $1,269.60 an ounce. March silver rose 11.7 cents, or 0.7%, to end at $16.27 an ounce.
Crude oil futures ended higher on Wednesday, 20 December 2017 after data showed a larger-than-expected drop in U.S. crude inventories.
West Texas Intermediate crude for February delivery on the New York Mercantile Exchange rose 53 cents, or 0.9%, to settle at $58.09 a barrel after initially flipping between small advances and losses after the Energy Information Administration said U.S. crude supplies fell by 6.5 million barrels in the week ended 15 December. Market had forecast a fall of 3.2 million barrels. February Brent crude rose 76 cents, or 1.2%, to finish at $64.56 a barrel.
On Thursday, investors will receive the third estimate of third quarter GDP (consensus +3.3%), the Philadelphia Fed Index for December (consensus 21.0), and weekly Initial Claims (consensus 236K) at 8:30 ET, followed by the October FHFA Housing Price Index (consensus +0.4%) and the November Leading Economic Index (consensus +0.4%), which will cross the wires at 9:00 ET and 10:00 ET, respectively.
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