Wall Street drifts lower, investors worry about tax-cut delay
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NEW YORK, March 21 — Wall Street drifted lower yesterday as investors worried that President Donald Trump's plan to cut taxes and boost the economy could take longer than previously expected.
The US stock market has been on a record-setting spree since the election of Trump as president, but the rally has faltered in recent weeks as investors fret about a lack of clarity on his proposals to reform taxes and cut regulation.
The S&P 500 and the Dow ended lower after FBI Director James Comey told a congressional hearing he had seen no evidence to support a claim by Trump that former President Barack Obama had wiretapped his campaign headquarters in Trump Tower in New York.
His unsubstantiated tweet distracted from the claims of Russian interference in the election — as well as efforts by Republicans to push through a healthcare overhaul.
“It's just one more day delaying talking about policy,” said Ian Winer, director of trading at Wedbush Securities in Los Angeles. “The market wants tax reform, and you need to get healthcare done before you get tax reform.”
The SPDR S&P Retail ETF fell 1.5 per cent, all but erasing its gains since Trump's election as investors fretted that a border adjustment tax being pushed by Republicans in Congress would lead to higher prices for consumer products.
The S&P 500 is unchanged from a week ago, but since the presidential election on Nov 8, it has surged 11 percent, heightening concerns about valuations. The S&P 500 is trading at nearly 18 times expected earnings, compared with a 10-year average of 14, according to Thomson Reuters Datastream.
The Dow Jones Industrial Average inched down 0.04 per cent to end at 20,905.86 points, while the S&P 500 lost 0.20 per cent to 2,373.47.
The Nasdaq Composite edged up 0.01 per cent to finish at 5,901.53 after briefly hitting an intraday record high.
Seven of the 11 major S&P sectors were lower, with the financial index's 0.9 per cent fall leading the decliners.
Oil fell as investors continued to unwind bets on higher prices.
The US Federal Reserve's conservative rate guidance is also keeping the market in check. A host of Fed officials are scheduled to speak this week, including Chair Janet Yellen on Thursday.
The Fed is on track to raise interest rates twice more this year and it could be more or less aggressive depending on inflation and fiscal policies from the Trump administration, Chicago Fed President Charles Evans said yesterday.
Last week, the central bank raised interest rates for the first time this year but stuck to its outlook for two more hikes this year, instead of three expected by the market.
Apple rose 1.05 per cent to a record-high close of US$141.46 (RM626.31) after Cowen & Co upgraded its price target on the stock.
Caterpillar rose 2.68 per cent, providing the biggest boost to the Dow, after it reported a smaller decline in sales for the 3 months through February versus the period ending in January.
Walt Disney rose 0.85 per cent after the company's Beauty and the Beast topped box-office sales. The stock was among the biggest gainers on the Dow.
Declining issues outnumbered advancing ones on the NYSE by a 1.40-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favoured decliners.
The S&P 500 posted 26 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 103 new highs and 38 new lows.
About 5.8 billion shares changed hands in US exchanges, compared with the 7.1 billion daily average over the last 20 sessions. — Reuters