Investors’ concerns over the prospects of a US tax overhaul have sent stocks sliding on Wall Street.
Another batch of quarterly profit reports also contributed to individual stock moves, with mixed results coming from some retailers.
A the close, the Dow Jones Industrial Average plunged 153.92 points, or 0.65%, to 23,409.44. The S&P 500 also fell 0.65% to 2577.41, while the Nasdaq Composite dropped 0.6% to 6750.05.
The pullback was broad, with nine of 11 sectors in the S&P 500 trading lower.
The Republican effort to pass a $US1.5 trillion tax cut is at a critical stage in the Congress. It is being complicated by the Senate planning to push through a different proposal.
Mark Travis, chief executive of Intrepid Capital Management, a Milwaukee-based fund manager, says the selloff intensified after reports the Senate tax bill would delay the corporate tax-rate cut until 2019.
He added that the delay would likely cause investors to sell some of their assets to lock some of the year’s gains.
“It doesn’t take a lot of friction for people to say they’re moving to cash,” Mr Travis says.
Technology stocks lead fall
Technology stocks are among some of the worst performers, falling 0.4% in the S&P 500. Advanced Micro Devices fell 5% and Nvidia was off 1.8%. Google parent Alphabet fell 1%.
Wall Street’s “fear gauge,” the CBOE Volatility Index was up 12%.
Among retailers, shares of Macy’s rose 11% after it beat profit estimates on lower revenue. Kohl’s rose 0.9% after it fell short of profit expectations even though it had grown its same-store sales.
Dish Network gained 3.5% after reporting a lower profit and saying it added fewer new subscribers compared with the same period a year earlier.
In Europe, the Stoxx 600 fell 1.1%, with technology and mining stocks among the biggest laggards. The UK’s FTSE 100 fell 0.6%, France’s CAC 40 was down 1.2% and Germany’s DAX shed 1.5%.
Burberry shares fell about 10% after the fashion brand said it didn’t expect sales to increase until fiscal 2021.
Siemens fell 3.7% after the German industrial group said fourth-quarter net profit rose but showed trouble at its wind energy and gas and power businesses.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Former BNZ chairman Kerry McDonald on why changes to banking regulation are needed
- Veriphi's Greg Shanahan explains the startup's progress and setbacks
- NZSA CEO Michael Midgley on NZX’s exoneration of Fletcher’s board
- Trade Me's Nigel Jeffries and Property Investors' Federation's Andrew King on the housing rental shortage and rent rises
- SME Leap convenor Tenby Powell on what he hopes the forum will achieve
- NBR Radio: A year in review, with Grant Walker