While you were sleeping: Stocks drop despite recovery in tech shares

After a positive start start, Wall Street pulled back as investors assessed the impact of potential revisions to the Republican tax bill that is set to cut corporate tax rates.

"It's the speculation on the details of tax bill that's being played out in the market," Massud Ghaussy, director at Nasdaq Advisory Services, told Reuters.

"Expect the next two or three days for the market to behave irrationally. A lot of changes are being made to the tax bill and it obviously impacts various sectors in different ways."

In the final hour of trading in New York, the Dow Jones Industrial Average is down 110 points, or 0.45%, at 24,185. The Nasdaq Composite Index has rebounded to be steady at 6773, while the Standard & Poor's 500 Index is down 0.3% at 2631.

"Tech is reversing a bit on both an absolute and relative basis as some of the rotation out of the sector and into banks, industrials, and other sectors we've seen over the past week gets walked back," George Pearkes, a macro strategist at Bespoke Investment Group, told Bloomberg.

The Dow fell as declines in shares of Walt Disney and those of Intel, recently down 2.3 percent and 2.1 percent respectively, outweighed gains in shares of McDonald's and those of Visa, recently up 1.6 percent and 1.4 percent respectively.

In Europe, the Stoxx 600 Index ended the session with a 0.2 percent decrease from the previous close. Germany's DAX Index slipped 0.1 percent, the UK's FTSE 100 Index fell 0.2 percent, while France's CAC 40 Index declined 0.3 percent.

While investors are eyeing a deadlock in Brexit talks, the latest economic data offered reasons for optimism.

"Business as a whole in the euro zone has so far been largely unaffected by political uncertainty in many countries, notably Germany and Spain, once again defying widespread expectations that growth would slow," said Chris Williamson, chief business economist at London-based IHS Markit, Bloomberg reported. "Given the strength of order-book growth and hiring, as well as the elevated level of business optimism, the euro zone should start the new year on a solid footing."

Shares of Switzerland's Nestle closed 0.4 percent higher in Zurich.

Nestlé said it agreed to acquire privately-held Atrium Innovations, a global leader in nutritional health products, from a group of investors led by Permira Funds for US$2.3 billion in cash as part of the company's drive to expand in consumer health care.

Quebec, Canada-based Atrium's 2017 sales are expected to reach almost US$700 million, Nestle said in a statement. The transaction is expected to close in the first quarter of 2018, it said.

"They've been trying to articulate a message around Nestle Health Science and health and wellness for some time," Liberum analyst Robert Waldschmidt said, Reuters reported. "In terms of nutrition, this makes sense."

(BusinessDesk)