Wall Street pulls back at week's end with tax changes mulled

Wall Street ended the week on a sour note on Friday, with major indexes slipping modestly as investors weighed the fate of the Republicans' tax overhaul plan. Investors have been hopeful that a tax bill under debate in Congress will boost corporate earnings and further fuel the stock market's record-setting run.
Congressional Republicans took important steps on Thursday toward the biggest US tax-code overhaul since the 1980s, with the House of Representatives approving a broad package of tax cuts. The debate shifts to the Senate, where a bill has already encountered resistance within the Republican ranks. A Reuters poll showed that nearly two-thirds of more than 60 economists said they were not confident the Trump administration would get the legislation passed this year.
"I think there is a fear that they are not going to be able to get enough support to really get something on the president's desk to sign," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "The week started with a lot of optimism for tax reform and I think we are ending the week a little hung over," Dollarhide said.
The Dow Jones Industrial Average fell 100.12 points, or 0.43 percent, to 23,358.24, the S&P 500 lost 6.79 points, or 0.26 percent, to 2,578.85 and the Nasdaq Composite dropped 10.50 points, or 0.15 percent, to 6,782.79. The benchmark S&P 500 has rallied more than 15 percent this year, supported by corporate earnings growth and solid economic data.
With nearly all of the S&P 500 companies reporting results, third-quarter earnings are expected to have climbed 8.2 percent, according to Thomson Reuters I/B/E/S. "The earnings in the third quarter are pretty good," John Carey, portfolio manager at Amundi Pioneer Asset Management in Boston. "There remains a little bit of uneasiness around political risk, domestically and internationally."
Abercrombie & Fitch jumped 23.9 percent and Gap rose 7.0 percent after the apparel retailers reported results that beat estimates. Shares of sports retailers soared on better-than-expected earnings. Foot Locker jumped 28.2 percent, Shoe Carnival surged 29.7 percent and Hibbett Sports gained 15.2 percent.
Twenty-First Century Fox shares rose 6.2 percent after two people familiar with the situation said both Comcast and Verizon were interested in buying parts of its studio and TV operations. Advancing issues outnumbered declining ones on the NYSE by a 1.83-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored advancers. About 6.3 billion shares changed hands in US exchanges, below the 6.8 billion daily average over the last 20 sessions.