Wall Street wavers as Disney falls and tech rebounds

Business


(Reuters) – Wall Street treaded water on Tuesday as Microsoft and other technology stocks rebounded and Walt Disney Co fell, while investors assessed how a Republican tax overhaul would impact corporate earnings.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 28, 2017. REUTERS/Brendan McDermid

Microsoft rose 1.27 percent, helping push the S&P information technology index up 0.76 percent. This year’s top-performing sector remains down about 3 percent since it has sold off over the past week, with investors reallocating money to banks, retailers and other stocks seen winning most from tax cuts promised by President Donald Trump.

The bill passed on Saturday by Republican senators included a last-minute change retaining the corporate alternative minimum tax, or AMT, which had initially been removed.

That put Senate Republicans on a collision course with Republicans in the House of Representatives, whose own tax bill repealed the corporate AMT and who are already calling for the tax to be eliminated in the final legislation. Including the AMT could negate parts of the bill seen as beneficial to tech companies and other corporations.

“Sentiment still remains that tax reform will get done and we will get a 20-percent tax rate, and that will boost earnings significantly,” said Lindsey Bell, an investment strategist at CFRA Research.

At 2:15 pm ET, the Dow Jones Industrial Average .DJI was down 0.15 percent at 24,252.89 points, while the S&P 500 .SPX had lost 0.02 percent to 2,638.86.

The Nasdaq Composite .IXIC added 0.33 percent to 6,797.42.

Eight of the 11 major S&P sectors were lower, led by losses in telecom services .SPLRCL and utilities .SPLRCU.

Shares of Twenty-First Century Fox (FOXA.O) climbed 0.6 percent after a report that Walt Disney (DIS.N) was in the lead to acquire much of Fox’s media empire, though rival suitor Comcast (CMCSA.O) remained in contention.

Disney shares fell 2.2 percent and Comcast also slipped 1.4 percent.

McDonald’s (MCD.N) rose 1.43 percent, providing the biggest boost to the Dow, after Jefferies upgraded the stock with a “buy” rating.

Toll Brothers (TOL.N) fell 7.4 percent after the luxury homebuilder’s profit and revenue missed analysts’ expectations as it sold homes at prices lower than its own estimates.

Declining issues outnumbered advancing ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.

Additional reporting by Rama Venkat Raman and Sruthi Shankar in Bengaluru; Editing by Nick Zieminski

Our Standards:The Thomson Reuters Trust Principles.



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