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Benchmarks ended in the red on Monday following reports from Bloomberg that the House was considering a ‘gradual phasing-in’ of corporate tax rates. This hurt investor sentiment and caused broad based losses for the markets. Market watchers also awaited the announcement of the next Fed Chief, whose name President Trump is expected to reveal on Thursday. Meanwhile, markets also suffered after Paul Manafort was convicted in the Russian meddling case.
The Dow Jones Industrial Average (DJIA) closed at 23,348.74, losing 0.4%. The S&P 500 Index (INX) decreased 0.3% to close at 2,572.83. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,701.26, decreasing 0.03%. Declining issues outnumbered advancers on the NYSE by 1,469 to 1,308. On the Nasdaq, decliners outnumbered advancers by 1,625 to 1,049. The CBOE VIX increased 4.6% to close at 10.25.
Benchmarks Post Losses
The Dow declined 85.5 points to end the session with losses. The blue-chip index was weighed down by a decline in the shares of Merck & Co. (MRK - Free Report) and Verizon Communications (VZ - Free Report) , shares of which declined 6.1% and 2.1%, respectively. Merck suffered its biggest two-day decline following reports that it had withdrawn its application seeking approval for the usage of its cancer immunotherapy drug in Europe.
Of the 11 major sectors of the S&P 500, seven ended in the red, with healthcare stocks leading the decliners. The Health Care Select Sector SPDR ETF (XLV) dipped 1.1% on Monday, posting its worst one-day dip since Aug 17. Moreover, a decline in the shares of Advanced Micro Devices, Inc. (AMD - Free Report) and General Motors (GM - Free Report) led the S&P 500 lower.
While, shares of AMD declined after some analysts from Morgan Stanley (MS - Free Report) commented that demand for cryptocurrency mining chips will be reduced almost 50%, shares of GM plunged after analysts from Goldman Sachs (GS - Free Report) downgraded the stock to sell.
House Proposes ‘Gradual Phase-in’ of Corporate Taxes
Reports from Bloomberg surfaced on Monday that legislators from the House who are involved in the formulation of the new tax code were considering a possible ‘phasing-in’ of the corporate tax-rate cut. This would effectively reduce the current rate of corporate tax — at 35% — to 20% by 2022. However, House Ways and Means Chairman Kevin Brady commented that the procedure is still under review and there has not been any formal decision on it.
The guidelines of the proposal state that tax rates would be slashed by three percentage points each year, beginning in 2018. The economists have clearly stated that if such a framework is adopted it would not only become less effective but would also delay any economic effects that President Trump and his aides aim to achieve. However, White House Press Secretary Sarah Huckabee Sanders, in a press meeting, commented that Trump wants to immediately slash the tax rates.
Such news led to losses for the Russell 2000 index which declined 1.2% to post its worst single-day decline since Aug 17.
Investor sentiment was also hurt after Trump’s former campaign manager Paul Manafort was charged with conspiracy against the United States for an alleged Russian meddling in 2016 Presidential elections. Meanwhile, investors also eagerly wait to know as to whom Trump would choose as the next Fed Chief. Trump is expected to announce his decision on Thursday.
Economic Data
On the economic data front, personal income for the month of September increased 0.4%, up from 0.2% in August. The consensus estimate for the period was also 0.4%. On the other hand, the consumer spending surged 1%, more than the Zacks Consensus Estimate of 0.8%. This marks its highest level in almost 8 years. Such a rally can be attributed to the fact that the residents of hurricane ravaged Texas and Florida replaced their flood-damaged automobiles. Economists believe that this would have only a short term effect on consumer spending. Meanwhile, the Core PCE inflation for September increased 0.1%, in line with the consensus estimate.
Under Armour, Inc. (UAA - Free Report) reported mixed quarterly numbers in third-quarter 2017, wherein earnings came ahead of the Zacks Consensus Estimate but revenues lagged the same. (Read More)
Archer Daniels Midland Company (ADM - Free Report) reported a dismal third-quarter 2017, wherein both the top and bottom lines lagged estimates and declined year over year. (Read More)
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Stock Market News For Oct 31, 2017
Benchmarks ended in the red on Monday following reports from Bloomberg that the House was considering a ‘gradual phasing-in’ of corporate tax rates. This hurt investor sentiment and caused broad based losses for the markets. Market watchers also awaited the announcement of the next Fed Chief, whose name President Trump is expected to reveal on Thursday. Meanwhile, markets also suffered after Paul Manafort was convicted in the Russian meddling case.
The Dow Jones Industrial Average (DJIA) closed at 23,348.74, losing 0.4%. The S&P 500 Index (INX) decreased 0.3% to close at 2,572.83. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,701.26, decreasing 0.03%. Declining issues outnumbered advancers on the NYSE by 1,469 to 1,308. On the Nasdaq, decliners outnumbered advancers by 1,625 to 1,049. The CBOE VIX increased 4.6% to close at 10.25.
Benchmarks Post Losses
The Dow declined 85.5 points to end the session with losses. The blue-chip index was weighed down by a decline in the shares of Merck & Co. (MRK - Free Report) and Verizon Communications (VZ - Free Report) , shares of which declined 6.1% and 2.1%, respectively. Merck suffered its biggest two-day decline following reports that it had withdrawn its application seeking approval for the usage of its cancer immunotherapy drug in Europe.
Of the 11 major sectors of the S&P 500, seven ended in the red, with healthcare stocks leading the decliners. The Health Care Select Sector SPDR ETF (XLV) dipped 1.1% on Monday, posting its worst one-day dip since Aug 17. Moreover, a decline in the shares of Advanced Micro Devices, Inc. (AMD - Free Report) and General Motors (GM - Free Report) led the S&P 500 lower.
While, shares of AMD declined after some analysts from Morgan Stanley (MS - Free Report) commented that demand for cryptocurrency mining chips will be reduced almost 50%, shares of GM plunged after analysts from Goldman Sachs (GS - Free Report) downgraded the stock to sell.
House Proposes ‘Gradual Phase-in’ of Corporate Taxes
Reports from Bloomberg surfaced on Monday that legislators from the House who are involved in the formulation of the new tax code were considering a possible ‘phasing-in’ of the corporate tax-rate cut. This would effectively reduce the current rate of corporate tax — at 35% — to 20% by 2022. However, House Ways and Means Chairman Kevin Brady commented that the procedure is still under review and there has not been any formal decision on it.
The guidelines of the proposal state that tax rates would be slashed by three percentage points each year, beginning in 2018. The economists have clearly stated that if such a framework is adopted it would not only become less effective but would also delay any economic effects that President Trump and his aides aim to achieve. However, White House Press Secretary Sarah Huckabee Sanders, in a press meeting, commented that Trump wants to immediately slash the tax rates.
Such news led to losses for the Russell 2000 index which declined 1.2% to post its worst single-day decline since Aug 17.
Investor sentiment was also hurt after Trump’s former campaign manager Paul Manafort was charged with conspiracy against the United States for an alleged Russian meddling in 2016 Presidential elections. Meanwhile, investors also eagerly wait to know as to whom Trump would choose as the next Fed Chief. Trump is expected to announce his decision on Thursday.
Economic Data
On the economic data front, personal income for the month of September increased 0.4%, up from 0.2% in August. The consensus estimate for the period was also 0.4%. On the other hand, the consumer spending surged 1%, more than the Zacks Consensus Estimate of 0.8%. This marks its highest level in almost 8 years. Such a rally can be attributed to the fact that the residents of hurricane ravaged Texas and Florida replaced their flood-damaged automobiles. Economists believe that this would have only a short term effect on consumer spending. Meanwhile, the Core PCE inflation for September increased 0.1%, in line with the consensus estimate.
Stocks That Made Headlines
Under Armour Q3 Earnings Top, Stock Tanks on View Cut
Under Armour, Inc. (UAA - Free Report) reported mixed quarterly numbers in third-quarter 2017, wherein earnings came ahead of the Zacks Consensus Estimate but revenues lagged the same. (Read More)
Archer Daniels (ADM - Free Report) Topples on Q3 Earnings & Sales Miss
Archer Daniels Midland Company (ADM - Free Report) reported a dismal third-quarter 2017, wherein both the top and bottom lines lagged estimates and declined year over year. (Read More)
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>