NEW YORK - Global stock markets edged lower on Tuesday, while US Treasury yields rose, as Republican legislation with steep cuts to corporate taxes cleared the House of Representatives and headed towards a final vote in the Senate.
US stocks hit successive highs ahead of the tax overhaul bill, but modest selling has crept into the market as most traders see the positive impact of the bill as already priced in.
"I really think it might be: buy the rumor, sell the news," said Jim Paulsen, chief investment strategist with the Leuthold Group in Minneapolis. "Wall Street has had long enough to vet this thing."
The Dow Jones Industrial Average fell 37.45 points, or 0.15 percent, to end at 24,754.75, the S&P 500 lost 8.69 points, or 0.32 percent, to 2,681.47 and the Nasdaq Composite dropped 30.91 points, or 0.44 percent, to 6,963.85.
The pan-European FTSEurofirst 300 index lost 0.51 percent and MSCI's gauge of stocks across the globe shed 0.30 percent.
The US House of Representatives approved the tax bill by a vote of 227-203. A Senate decision could come Tuesday night on what would be the biggest US tax overhaul in more than 30 years. However, the US Senate parliamentarian has ruled against three provision of the Republican tax bill, forcing the House of Representatives to hold a second vote on the legislation, Senator Bernie Sanders said.
President Donald Trump is expected to sign the bill into law by the end of the week if it is passed by the Senate.
The plan includes slashing the corporate tax rate to 21 percent from 35 percent, which analysts say would likely increase profits, buybacks and dividend payouts.
A slump in technology stocks, led by Apple Inc, also helped drag markets down in afternoon trading.
Apple shares fell more than 1 percent after broker Instinet downgraded the stock to "neutral" from "buy" on doubts about iPhone X sales.
US Treasury yields rose with the benchmark yield hitting a 7-week high as the tax bill pushed forward.
Before the House vote, bonds were selling in reaction to data that showed US domestic home construction rose to a 13-month peak in November, with single-family home construction hitting a 10-year high.
Now, bond investors could be pulling back on expectations of economic growth, said Jack Ablin, chief investment officer with BMO Private Bank in Chicago. "Some may be concerned the boost on the fiscal side can be offset by monetary tightening," Ablin said.
Benchmark 10-year US Treasury notes were last down 20/32 in price to yield 2.4644 percent, from 2.392 percent late Monday.
The 30-year bond was down 1-17/32 in price to yield 2.206 percent, from 2.744 percent.
The US dollar, which slipped on tax plan doubts on Monday, began to flatten on the unexpectedly strong housing data.
In late trading, the dollar rose 0.3 percent against the yen to 112.92 yen. It was little changed against the Swiss franc, but higher versus sterling as well as the Australian, Canadian and New Zealand dollars.
The dollar index, which fell 0.26 percent, was weaker against the euro, which was up 0.5 percent to $1.1840.
Gold, which dipped as US Treasury yields rose, is on track to post its narrowest trading range of any quarter in a decade in the last 3 months of the year.
Spot gold added 0.1 percent to $1,262.07 an ounce. US gold futures fell 0.02 percent to $1,265.20.
Oil rose slightly, aided by an ongoing North Sea pipeline outage, supply cuts and expectations that US crude inventories had fallen for a fifth week.
Brent crude was up 42 cents or 0.66 percent to $63.83 a barrel. US crude rose 47 cents or 0.8 percent to $57.69.
source: news.abs-cbn.com
NEW YORK - Global stocks rallied Monday as a massive US tax cut plan neared final passage, lifting Wall Street to fresh records and boosting international bourses.
Wall Street has grown increasingly giddy this month as obstacles to the massive tax cut package have been overcome and momentum builds for a measure that is expected to be sent to President Donald Trump's desk by the end of the year. The House is expected to vote Tuesday afternoon.
All 3 major US equity indices notched records for the second session in a row, with the Nasdaq breaching 7,000 for the first time during the session before finishing a bit below that mark.
The gains were even bigger in some overseas markets.
In Europe, London's benchmark FTSE 100 index rose 0.6 percent, though the advance limited by the pound rising against the dollar impacting multinational UK companies whose reported earnings are in the US currency.
In the eurozone, Frankfurt's DAX 30 rallied 1.6 percent, with sentiment boosted by coalition talks due this week between Chancellor Angela Merkel's Christian Democrats and the Social Democrats.
The Paris CAC 40 advanced 1.3 percent.
"The prospect of tax cuts being approved ahead of Christmas is propping up global stock markets," said market analyst David Madden at CMC Markets UK.
The Nikkei in Japan snapped a 4-day losing streak, advancing 1.6 percent on positive momentum from the US.
Elsewhere on Monday, bitcoin jumped almost 10 percent to $19,500 at one point, according to Bloomberg, as the CME Group, which runs the world's biggest futures exchange, began trading futures in the cryptocurrency Sunday. It later fell back to $18,658.
The CME listing came a week after bitcoin started on the Cboe, the first time it had appeared on a major exchange and marking a watershed for the unit.
On the corporate front, shares in Thales soared more than 8 percent to 93.31 euros -- a day after the French aerospace and defense group said it was buying European SIM manufacturer Gemalto for 4.8 billion euros ($5.7 billion) to become a global leader in digital security.
Gemalto stock was up 5.6 percent at 49.46 euros.
Warren Buffet's Berkshire Hathaway "A" shares rose 1.0 percent after briefly pushing above $300,000 for the first time.
KEY FIGURES AROUND 2200 GMT (6 a.m. Tuesday in Manila)
New York - DOW: UP 0.6 percent at 24,792.20 (close)
New York - S&P 500: UP 0.5 percent at 2,690.16 (close)
New York - Nasdaq: UP 0.8 percent at 6,994.76 (close)
London - FTSE 100: UP 0.6 percent at 7,537.01 points (close)
Paris - CAC 40: UP 1.3 percent at 5,420.58 (close)
Frankfurt - DAX 30: UP 1.6 percent at 13,312.30 (close)
EURO STOXX 50: UP 1.4 percent at 3,611.12
Tokyo - Nikkei 225: UP 1.6 percent at 22,901.77 (close)
Hong Kong - Hang Seng: UP 0.7 percent at 29,050.41 (close)
Shanghai - Composite: UP 0.1 percent at 3,267.92 (close)
Euro/dollar: UP at $1.1782 from $1.1755 at 2200 GMT on Friday
Pound/dollar: UP at $1.3383 from $1.3323
Dollar/yen: DOWN at 112.56 yen from 112.63 yen
Oil - Brent North Sea: UP 18 cents at $63.41 per barrel
Oil - West Texas Intermediate: DOWN 14 cents at $57.16 per barrel
source: news.abs-cbn.com
NEW YORK - US stocks finished mixed Monday with high-flying technology shares experiencing profit taking as global markets digested the Senate's passage of a massive tax cut plan.
The Senate's 51-49 passage of the Republican tax measure late Friday night sets the stage for President Donald Trump to sign into law Wall Street's biggest priority in time for Christmas.
US stocks appeared braced for another banner session, opening sharply higher in the aftermath of the Senate's action. But technology shares later sold off, pushing the S&P 500 and Nasdaq into the red.
The Dow still mustered a modest record, climbing 0.2 percent to 24,290.05.
"It's a little bit of a rotation today again, out of some of the high flying momentum names," said Art Hogan, chief market strategist at Wunderlich Securities.
Investors in Europe cheered the prospect of higher corporate profits in the US, and progress on the bill also boosted the dollar at the euro's expense, helping export-oriented stocks.
The DAX 30 in Frankfurt jumped 1.5 percent and the CAC 40 in Paris climbed 1.4 percent.
A strong pound limited the gains to London's FTSE 100 to 0.5 percent.
The pound gained against the dollar for much of the day as British Prime Minister Theresa May appeared to be closing in on sealing a deal on divorce terms with EU chiefs and making progress towards resolving the thorny issue of the Irish border.
But it fell back after European Commission President Jean-Claude Juncker said the sides did not reach "complete agreement."
The greenback strengthened against the yen and the euro, though dealers remain reticent as both houses of Congress must reconcile their differing bills before sending a final draft to the White House, while analysts also warned of political risk.
"If the legislation gets ratified quickly, there would likely be another dollar bounce, but the longer this drags out, the dollar will probably sell off as political uncertainty has been the greenback's undoing over and over again in 2017," said Stephen Innes, head of Asia-Pacific trading at OANDA.
Kathy Lien of BK Asset Management said, "Investors are still worried that tax reform will be a drawn out process -- reconciliation of the House and Senate bills is the next step and while there are vast differences, leaders of both houses are highly motivated to get a deal done.
"So we believe it is only be a matter of time before a final proposal is agreed upon and passed to the White House for President Trump's signature."
KEY FIGURES AROUND 2200 GMT (6 a.m. Tuesday in Manila)
New York - DOW: UP 0.2 percent at 24,290.05 (close)
New York - S&P 500: DOWN 0.1 percent at 2,639.44 (close)
New York - Nasdaq: DOWN 1.1 percent at 6,775.37 (close)
London - FTSE 100: UP 0.5 percent at 7,338.97 points (close)
Frankfurt - DAX 30: UP 1.5 percent at 13,058.55 (close)
Paris - CAC 40: UP 1.4 percent at 5,389.29 (close)
EURO STOXX 50: UP 1.3 percent at 3,573.89
Tokyo - Nikkei 225: DOWN 0.5 percent at 22,707.16 (close)
Hong Kong - Hang Seng: UP 0.2 percent at 29,138.28 (close)
Shanghai - Composite: DOWN 0.2 percent at 3,309.62 (close)
Euro/dollar: DOWN at $1.1865 from $1.1899 at 2200 GMT
Pound/dollar: DOWN at $1.3470 from $1.3477
Dollar/yen: UP at 112.41 yen from 112.12 yen
Oil - Brent North Sea: DOWN $1.28 at $62.45 per barrel
Oil - West Texas Intermediate: DOWN 89 cents at $57.47 per barrel
burs-jmb/hs
source: news.abs-cbn.com
WASHINGTON -- US Senate Republicans made last-minute changes to their tax bill to secure enough votes to pass the sweeping legislation on Saturday and move on to negotiations this week on a final measure with Republicans in the House of Representatives.
The deals enabled leadership to get 4 wavering Republican senators on board with the legislation by addressing issues such as deductions for state and local property taxes and the tax treatment of so-called pass-through enterprises.
Republicans also agreed to changes to help pay for the deals, including higher tax rates on the repatriation of US corporate profits held overseas.
Following are some of the changes:
* STATE AND LOCAL PROPERTY TAXES: Senator Susan Collins got Senate Republican leaders to include a federal deduction for up to $10,000 in state and local property taxes in the legislation, which eliminates a similar deduction for state and local income and sales taxes.
The nonpartisan Joint Committee on Taxation, or JCT, estimates that the change will mean the loss of an additional $148 billion in federal revenue over the next decade, compared with a legislative proposal approved earlier by the Senate Budget Committee.
* PASS-THROUGHS: Under pressure from Senators Ron Johnson and Steve Daines, Senate Republican leaders increased to 23 percent from 17.4 percent a deduction for the owners of pass-through enterprises including small businesses, S-corporations, partnerships and sole proprietorships.
JCT estimated revenue loss versus earlier legislative proposal: $114 billion.
* FULL EXPENSING: Senator Jeff Flake, who had been a holdout over deficit concerns, agreed to vote "yes" after Republican leaders did away with an abrupt end to the full business expensing of capital investments after five years. Instead, the bill phases out full expensing in 20 percent increments over 4 years, beginning in year 6. Flake said Congress would not have been able to suddenly eliminate full expensing and that benefit would have been left to bleed red ink for years to come.
JCT revenue loss estimate versus earlier legislative proposal: $34 billion.
* MEDICAL EXPENSES: Collins also added language to reduce the threshold for deducting unreimbursed medical expenses for 2 years to 7.5 percent of household income from 10 percent.
JCT estimated revenue loss versus earlier legislative proposal: $4.6 billion.
* RETIREMENT SAVINGS: Collins persuaded Republican leaders to retain catch-up contributions to retirement accounts for church, charity, school and public employees.
No immediate JCT revenue impact estimate.
* INDIVIDUAL ALTERNATIVE MINIMUM TAX: Republicans rescinded an earlier provision to repeal the individual AMT but increased exemption amounts and phase-out thresholds to make the tax less onerous.
JCT estimated revenue gain versus earlier legislative proposal: $133 billion over a decade.
* REPATRIATION: Senate Republicans increased tax rates on the repatriation of US corporate profits held overseas to 14.5 percent for liquid assets and 7.5 percent for illiquid holdings, up from 10 percent and 5 percent, respectively.
JCT estimated revenue gain versus earlier legislative proposal: $113 billion.
* CORPORATE ALTERNATIVE MINIMUM TAX: Republicans decided to retain this tax, after initially proposing its repeal.
JCT estimated revenue gain versus earlier legislative proposal: $40.3 billion.
source: news.abs-cbn.com
NEW YORK - US stocks rose and the dollar edged higher against a basket of major currencies on Thursday after the US House of Representatives passed its version of a tax overhaul bill.
Earnings-related gains in Wal-Mart and Cisco also boosted stocks, and the MSCI index of world stocks rose after 5 consecutive daily losses.
The Dow Jones Industrial Average and the S&P 500 chalked up their biggest percentage gains in over 2 months.
The House approved a broad package of tax cuts affecting businesses, individuals and families, moving Republicans and President Donald Trump an important step closer to the biggest tax code overhaul in a generation.
The legislative battle now shifts to the Senate, where the Republican majority is much slimmer. Republicans can lose no more than 2 Senate votes and at least 2 GOP senators have already spoken against the Senate version of the bill.
"The tax plan isn't a foregone conclusion but it passed the lowest hurdle in the House," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
"The even higher hurdle is to have something pass in the Senate. The reconciliation will be the real measure if it happens," he said.
The dollar index, which hit 93.813 on Wednesday, its lowest since Oct. 20, was also supported by a general improvement in risk appetite across financial markets. The index was last up 0.1 percent.
The Dow rose 187.08 points, or 0.8 percent, to 23,458.36, the S&P 500 gained 21.02 points, or 0.82 percent, to 2,585.64 and the Nasdaq Composite added 87.08 points, or 1.3 percent, to 6,793.29.
The pan-European FTSEurofirst 300 index rose 0.65 percent and MSCI's gauge of stocks across the globe gained 0.80 percent.
Oil prices extended their losing streak as rising US production and inventories threatened to undermine a rally sparked by tightening world supply as a consequence of OPEC's curbs on output.
US crude declined 19 cents to settle at $55.14 a barrel while Brent crude fell 51 cents to settle at $61.36.
US Treasury two-year yields hit a 9-year high as risk appetite recovered globally and a batch of neutral to solid economic reports put the Federal Reserve on track to raise interest rates in 2018.
The rise in 2-year yields pushed the curve to its flattest in a decade. The yield curve has declined for four straight days.
The gap between US 2-year note and US 10-year note yields contracted to 63.2 basis points m the tightest since November 2007. The gap was last at 65.1 basis points.
In late trading, the 10-year Treasury yield rose to 2.355 percent, from 2.335 percent late on Wednesday. US 2-year yields climbed to a 9-year peak of 1.716 percent, from 1.691 percent on Wednesday. Two-year yields were last at 1.712 percent.
source: news.abs-cbn.com
