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US stocks dip as Senate tax bill hits roadblock
December 02, 2017
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NEW YORK: Wall Street stocks dipped early on Friday after a vote on the Senate tax cut plan was delayed amid worries that it would explode the deficit.

Senate Republican leaders dropped plans for a Thursday vote but were still targeting Friday to pass the measure as they sought revenue-raising remedies after a bipartisan committee projected the bill would add $1 trillion to the federal deficit.

Still, the relatively modest pullback in stocks early in the session suggested most traders were still “expecting a deal to get worked out in the Senate,” said analyst Patrick O’Hare.

“If that was not the case, the futures would be much, much lower.” About 15 minutes into trading, the Dow Jones Industrial Average was at 24,225.87, down 0.2 per cent.

The broad-based S&P 500 also dropped 0.2 per cent to 2,642.81, while the tech-rich Nasdaq Composite Index lost 0.5 per cent at 6,841.64.

Large technology companies were in retreat, with Apple shedding 1.2 per cent and Amazon and Facebook both down 0.7 per cent.

Petroleum-linked shares advanced after Thursday’s Opec deal to extend output limits, with Dow member ExxonMobil up 0.9 per cent, Halliburton 2.9 per cent and Anadarko Petroleum 2.0 per cent.

EU market falls

Eurozone stocks slid on Friday on the strong euro while the Dow pushed higher despite renewed doubts about US tax cuts plans.

Although the euro dipped in afternoon trading, leading eurozone indices were down following the recent run higher for the single currency.

Eurozone “equity markets are paying the price” for the area’s recovery, said David Madden, market analyst at CMC Markets UK.

“Ultimately a stronger economy often translates into a stronger stock market, but for now the rally in the euro is holding them back” as current single currency valuations hurt the share prices of eurozone exporters.

Madden added that sterling had been hit by profit-taking.

“Optimism surrounding the Brexit talks pushed the pound to a two-year high versus the US dollar yesterday, and now we are seeing a pullback.” The weak pound helped push the FTSE to small gains.

Global equities have rallied this year on hopes for Trump’s market-friendly promises of tax cuts, infrastructure spending and deregulation, but analysts warn of a sharp sell-off if the plans fall flat.

In Asia on Friday, Tokyo’s main stocks index ended 0.4-per cent higher, back near 25-year peaks after reversing early losses thanks to a weaker yen.

Oil prices climbed a day after OPEC and Russia agreed to extend a cap on oil output by nine months until the end of next year.

The aim is to reduce a global excess in supply that has pushed oil prices lower and left a huge hole in the finances of producer nations, despite making life easier for buyers of crude.


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