While you were sleeping: Wall St drops as rival US tax plans confuse investors

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.