While you were sleeping: Wall St pauses after House votes to pass GOP tax bill

Wall Street fell from record highs following passage of the controversial Republican tax legislation.

Investors are now eying whether the Republican tax bill, set to cut corporate tax rates, will clear enough votes in the Senate to land on US President Donald Trump's desk.

"The market really has been trading in lock-step with the progress that's being made," Art Hogan, chief market strategist at B Riley FBR, told Bloomberg. "Any pause we're taking today is sort of taking a deep breath to see if we get across the goal line."

At the close of trading in New York, the Dow Jones Industrial Average slipped 37.45 points, or 0.15%, to 24,754.75. The Nasdaq Composite Index declined 0.4% while the Standard & Poor's 500 Index fell 0.3%.

US Treasuries also dropped, sending the yield on the 10-year note seven basis points higher to 2.463% from 2.392% on Monday.

Effective tax rates drop
Companies across all industries and sectors would pay an average effective tax rate of 9% next year under the tax-overhaul bill, Bloomberg reported, citing a Penn Wharton Budget Model study released on Tuesday.

By 2027, that average effective rate would double to 18% because of some corporate tax breaks that would move off the books, according to the study.

"Obviously there is high confidence that it will get passed, but there is a very narrow margin for error, within the Senate especially. So there's a little bit of a pause to see what's going to happen," Chris Zaccarelli, chief investment officer of Independent Advisor Alliance in Charlotte, North Carolina, told Reuters.

At Monday's close, 30% of the companies in the S&P 500 traded above their average analyst price target, Bloomberg reported, citing data compiled by Strategas Research Partners, meaning that those stocks have already climbed to levels where they're expected to be 12 months from now.

Apple falls on sales outlook
The Dow moved lower with Apple and General Electric down 0.9% and 0.8% respectively. Wal-Mart and Home Depot both rose 1%.

Apple shares fell as broker Instinet downgraded the stock to "neutral" from "buy" because of the outlook for iPhone X sales.

"We induce from muted iPhone X promotions that demand is likely to be in line with Apple's expectations for Q1," Jeffrey Kvaal, a technology analyst at the New York City-based brokerage, said in the note, according to media reports.

Meanwhile, a Commerce Department report showed US housing starts advanced more than expected in November, bolstered by single-family home building which climbed to the highest level in a decade.

In Europe, the Stoxx 600 Index fell 0.4%. France's CAC 40 Index dropped 0.7%, as did Germany's DAX Index. The UK's FTSE 100 Index eked out a 0.1% gain.