MARKET SNAPSHOT: U.S. Stocks Under Pressure As Tax Bill, Fed Boss Decision Come In To Focus

By Sara Sjolin and Anora M. Gaudiano, MarketWatch Features Dow Jones Newswires

Apple earnings are due after the market closes

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U.S. stock-market indexes pulled back Thursday, after details of the House Republican tax bill were unveiled.

Investors are also waiting for President Donald Trump's selection of a new Federal Reserve chairman and a number of high-profile earnings reports, including tech giant Apple and coffee-chain Starbucks.

What are stock indexes doing?

The S&P 500 was off by 11 points, or 0.4%, to 2,568, with nearly all of the 11 main sectors trading in negative territory.

The consumer discretionary sector was the hardest hit, down 0.8%, with losses led by home builder stocks (http://www.marketwatch.com/story/homebuilder-stocks-tumble-as-tax-plan-takes-bite-out-of-mortgage-deduction-2017-11-02) that plunged 2% on the proposal to cut mortgage interest deduction in half.

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The Dow Jones Industrial Average declined 65 points, or 0.3%, to 23,369.

The Nasdaq Composite Index fell 24 points, or 0.4%, to 6,691.

What's driving the markets?

House Republicans on Thursday unveiled the Tax Cuts and Jobs Act, new legislation that would cut corporate taxes and repeal taxes paid by large estates.

Hopes for the passage of tax reforms in Washington, including corporate tax cuts, have received some credit for gains by stocks over the past year. However, Thursday's tax bill details sent stocks, bonds yields and the dollar lower as traders weighed its chances of passing.

Read:Here's a breakdown of how the new House tax bill impacts your taxes (http://www.marketwatch.com/story/heres-a-breakdown-of-how-the-new-house-tax-bill-impacts-your-taxes-2017-11-02)

Also in focus is the next Fed chair. President Donald Trump is expected to announce his pick later Thursday, with Fed Gov. Jerome Powell seen as the likely choice. The Wall Street Journal reported that the White House has already notified Powell (http://www.marketwatch.com/story/white-house-has-informed-powell-he-will-be-next-fed-chief-report-2017-11-01) that Trump intends to nominate him.

Read:What a Jerome Powell-led Fed might look like (http://www.marketwatch.com/story/imagining-life-under-a-jerome-powell-fed-2017-10-20)

Read:How the next Federal Reserve chair could affect you and your mortgage (http://www.marketwatch.com/story/how-the-next-federal-reserve-chair-could-affect-you-and-your-mortgage-2017-10-31)

Across the pond, the Bank of England (http://www.marketwatch.com/story/boe-delivers-a-typical-dovish-hike-analysts-react-to-historic-uk-rate-rise-2017-11-02)raised its key interest rate by a quarter-percentage point to 0.5%, meeting widely held expectations for the first rate increase to be enacted since July 2007.

(http://www.marketwatch.com/story/5-things-investors-need-to-know-as-the-bank-of-england-prepares-for-historic-rate-hike-2017-10-31)What are analysts saying?

"Unveiling of the tax bill is a step one. Approving and passing the legislation is step two and it's not at all clear in what form or shape this bill will be passed," said Kim Caughey Forrest, senior analyst and portfolio manager at Fort Pitt Capital Group.

"Any tax reform will change the behavior of people, but at this stage we don't know how this behavior will change: will people prefer renting to home ownership? I think selling of home builders at this stage seems like a big overreaction," Forrest said.

What economic data are in focus?

Initial U.S. jobless claims (http://www.marketwatch.com/story/layoffs-in-us-back-to-nearly-45-year-low-jobless-claims-show-2017-11-02), a tool to measure layoffs, fell by 5,000 to 229,000 in the week ended Oct. 28. That was lower than the 235,000 estimate of economists polled by MarketWatch.

Meanwhile, the productivity of American firms and workers (http://www.marketwatch.com/story/hard-at-work-us-productivity-hits-three-year-high-2017-11-02)rose 3% in the third quarter.

Which stocks are in focus?

Shares of Tesla Inc. (TSLA) dropped 5.8% after the electric car maker late Wednesday reported a wider-than-expected loss (http://www.marketwatch.com/story/tesla-announces-worst-quarter-ever-model-3-delays-2017-11-01).

Facebook Inc.(FB) slipped 1.4% even after earnings out late Wednesday beat forecasts (http://www.marketwatch.com/story/facebook-stock-up-after-earnings-and-revenue-beat-2017-11-01). Lawmakers on Wednesday warned Facebook, Alphabet Inc.'s Google(GOOGL)(GOOGL) and Twitter Inc.(TWTR) that they are considering tougher regulations on social-media sites (http://www.marketwatch.com/story/lawmakers-warn-social-media-execs-to-fix-problems-or-face-new-regulations-2017-11-01)over concerns of foreign intervention via their platforms.

Alphabet shares were down 0.5%, and Twitter was down 0.9%.

L Brands, Inc. (LB) shares soared 9% after October sales growth. Ralph Lauren Corp.(RL) stock jumped 5.3% after better-than-expected earnings and revenue.

Alibaba Group Holding Ltd.(BABA) shares were up 1% after better-than-expected earnings.

DowDuPont Inc.'s (DWDP) stock was 0.8% lower even as the company exceeded profit and sales expectations.

Yum! Brands Inc.(YUM) shares rose 5.8% after beating earnings estimates.

And after the market closes, Apple and Starbucks Corp.(SBUX) are slated to report.

Read:Apple earnings: iPhone X supply is the question, but the answer may not matter (http://www.marketwatch.com/story/apple-earnings-iphone-x-supply-is-the-question-but-the-answer-may-not-matter-2017-10-30)

What are other markets doing?

The pound plunged to $1.31 (http://www.marketwatch.com/story/pound-strengthens-ahead-of-historic-boe-decision-2017-11-02) after the rate decision, compared with $1.3246 late Wednesday in New York.

Read:Here's how a Bank of England rate increase could 'kill' the British pound (http://www.marketwatch.com/story/heres-how-a-bank-of-england-rate-hike-could-kill-the-british-pound-2017-11-01)

The dollar fell against most other currencies, with the ICE Dollar Index down 0.3% at 94.538 and on track to break a two-day winning run. The yield on the 10-year Treasury bond was down 3 basis points to 2.34%.

European markets turned lower, while Asian markets closed mixed.

Oil futures were flat, while gold prices rallied 0.5%.

(END) Dow Jones Newswires

November 02, 2017 10:50 ET (14:50 GMT)