Market Snapshot: Dow, S&P 500 edge higher, but investors keep eye on tax plans

GE stock hasn’t been this low in over five years.

U.S. stocks edged higher Monday after the Dow and the S&P 500 posted their first weekly drops in two months last week. Upside was limited, however, as uncertainty continued to swirl around the state of Republican tax-cut legislation while blue-chip General Electric Co. tumbled to its lowest in over five years.

What are the main benchmarks doing?

The Dow Jones Industrial Average DJIA, +0.13% rose 29 points, or 0.1%, to 23,451. Gains in McDonald’s Corp. MCD, +1.29%  and Procter & Gamble Co. PG, +0.79% are counterbalancing a sharp decline in shares of GE GE, -8.34%

The S&P 500 SPX, +0.16% climbed 3 points, or 0.1%, to 2,585 and the Nasdaq Composite Index COMP, +0.19%  advanced 8 points, or 0.1%, to 6,759.

All three indexes are within 1% of their own all-time highs. Thus far this year, the Dow has gained 18.5% while the S&P is up 15.3% and the Nasdaq has gained 25.3%.

What is moving markets?

Analysts have blamed recent weakness on worries about delays in much-anticipated corporate tax cuts out of Washington. The three main stock gauges are still up by between 15% and 25% for the year, supported by factors such as an expanding U.S. economy and improving corporate profits.

Investors continue to monitor President Donald Trump’s 13-day visit to Asia. On Monday, Trump said he had a “great relationship” with Philippine President Rodrigo Duterte, and a White House official said human rights got only a brief mention as the two met in Manila, a Reuters report said.

On Sunday, the president teased a “major statement” on trade that he said he’ll make Wednesday. “A lot of things are happening on trade and I’ll be announcing pretty much what happened here and also with other meetings, including with China, South Korea and lots of other places,” Trump said from Manila.

See: Trump calls Kim Jong Un ‘short and fat,’ then offers his mediation skills for South China Sea dispute

What are strategists saying?

“The Senate bill differs from the House bill in significant ways, making delays likely as the two chambers work out their differences in conference committee,” Morgan Stanley wrote in a note to clients. “There is a chance that the House could pass the Senate’s final bill and be done with it, but the differences are so large that it feels unlikely to us at this point.”

Katie Stockton, chief technical strategist at BTIG, wrote that “global equity markets have seen a loss of short-term momentum that has finally given way to a pullback in the S&P 500 index.”

She added, “A pullback in the 2%-3% range might be enough to relieve the market of ‘overly bullish’ sentiment without generating a lot of breakdowns or affecting positive intermediate-term momentum,” Stockton said. It has been a historically long time since the market has seen a 3% decline from a peak, which are typically very common.

However, given that expectations for tax reforms are relatively low, it is “setting the stage for an upside surprise if successful,” said Jason Pride, director of investment strategy at Glenmede

What are other assets doing?

European stocks SXXP, -0.66% pulled back, and the pound GBPUSD, -0.5648%  dropped as British Prime Minister Theresa May faces fresh pressure to resign.

Most Asian markets closed lower, with the Nikkei NIK, -1.32%  falling the most since April, but Hong Kong’s Hang Seng Index HSI, +0.21%  managed a modest gain. Gold futures GCZ7, +0.33%  and the ICE U.S. Dollar Index DXY, +0.03% were higher.

The U.S. oil benchmark CLZ7, -0.05%  was up slightly, as a United Arab Emirates official said he expects major producers to extend global supply cuts at a closely watched meeting at the end of the month.

Check out: Should oil really be trading above $60 a barrel?

Which stocks are in focus?

GE skidded 7.9% following news the conglomerate plans to cut its dividend by half, with the conglomerate saying the move will help its effort to drive up growth and value for shareholders.

Shares in Mattel Inc. MAT, +20.35%  jumped 21% in the wake of a report late Friday that rival toy maker Hasbro Inc. HAS, +6.13%  has made a takeover offer. Shares of Hasbro were up nearly 5.7%.

Tyson Foods Inc.’s stock TSN, +1.82%  gained 1.6% after the company posted better-than-expected quarterly profit and revenue.

Shares in Boeing Co. BA, +0.49% rose 0.5% after the aerospace giant scored a $15 billion deal with Emirates Airline. The Dow component has gained nearly 70% in 2017.

GGP Inc. GGP, +8.15% rose 8.1% as Brookfield Property Partners LP BPY, -5.05%  has made a $14.8 billion offer to acquire the shares of the mall owner that it doesn’t already own. Shares of Brookfield fell 4.6%.

Shares of Nektar Therapeutics NKTR, +14.95%  soared 14% after the biopharmaceutical company announced over the weekend positive data from a trial of its cancer treatment.

Valeant Pharmaceuticals International Inc. VRX, -4.64%  said it was launching a private offering of $750 million worth of notes due 2025, paying 5.500%. The drugmaker plans to use the proceeds from the debt offering to repay a portion of term loan facilities due 2022. Shares of Valeant dropped 4.7%.

What’s on the economic calendar?

Philadelphia Fed President Patrick Harker in a speech Sunday pulled back slightly in his support for a December interest-rate hike.

No Federal Reserve officials are schedule to speak on Monday, but on Tuesday, departing Fed Chairwoman Janet Yellen is due to take part in a panel discussion with heads of other major central banks.

Read: With hurricane noise beginning to soften, economic focus turns to Fedspeak

—Victor Reklaitis contributed to this article

Filed in: Top News Tags: 

You might like:

Encore: Yellen says inflation below 2% goal poses one of Fed’s ‘biggest challenges’ Encore: Yellen says inflation below 2% goal poses one of Fed’s ‘biggest challenges’
NewsWatch: If you like the FAANGs, you’ll love these three year-end melt-up candidates NewsWatch: If you like the FAANGs, you’ll love these three year-end melt-up candidates
Why nearly half of office Christmas parties won’t have booze this year Why nearly half of office Christmas parties won’t have booze this year
Personal Finance Daily: What’s at stake in ‘net neutrality’ debate and why nearly half of office Christmas parties won’t have booze this year Personal Finance Daily: What’s at stake in ‘net neutrality’ debate and why nearly half of office Christmas parties won’t have booze this year
The Wall Street Journal: 6 Citgo execs arrested in Venezuela, accused of corruption The Wall Street Journal: 6 Citgo execs arrested in Venezuela, accused of corruption
The New York Post: Uber paid ransom to keep data breach affecting 57 million users and drivers quiet The New York Post: Uber paid ransom to keep data breach affecting 57 million users and drivers quiet
Earnings Results: Salesforce earnings top Street estimates but shares back off record after hours Earnings Results: Salesforce earnings top Street estimates but shares back off record after hours
Market Extra: Goldman: ‘Rational exuberance’ to drive stock market in 2018 Market Extra: Goldman: ‘Rational exuberance’ to drive stock market in 2018

Leave a Reply

Submit Comment
© 2017 Stock Investors News. All rights reserved. XHTML / CSS Valid.