U.S. stocks little changed after Senate passes tax bill
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-- Treasury yields climb to highest level since March
-- Micron Technology, FedEx among biggest gainers
U.S. stocks swung between small gains and losses Wednesday after the Senate passed the largest structural overhaul of the U.S. tax system in three decades.
The Dow Jones Industrial Average added 12 points, or 0.5%, to 24766. The S&P 500 was basically flat after Tuesday's losses, and the Nasdaq Composite declined 0.1%.
Although the Senate passed the sweeping tax bill early Wednesday, a last-minute glitch forced Republican leaders to schedule another vote in the House later Wednesday. The result isn't likely to be any different and the measure will head to President Donald Trump for his signature. Mr. Trump may wait until next year to sign the bill, depending on a separate provision to waive certain budget rules that trigger automatic spending cuts.
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Investors are now debating how much of the bill has already been priced into markets and what impact the changes will have on the economy. U.S. stocks have climbed to record highs recently, in part on expectations that the bill will boost corporate profits, particularly among banks and retailers, which tend to pay a higher effective tax rate.
"The question for 2018 is: Will there be a positive effect on growth from the tax cuts?" said Abi Oladimeji, chief investment officer at Thomas Miller Investment.
Some analysts believe the tax shake-up could lift growth and inflation in the U.S., pushing up bond yields and prompting the Federal Reserve to tighten monetary policy more quickly than anticipated. Some say a faster pace of interest-rate increases could threaten this year's stock-market rally, as accommodative central-bank policy in an improving global economy has supported stocks.
The yield on the 10-year U.S. Treasury note rose to 2.479%, according to Tradeweb, from 2.464% Tuesday, its highest level since March.
"I think central bank policy broadly is probably the biggest risk next year," said Shannon Saccocia, chief investment strategist at Boston Private.
The latest batch of corporate earnings drove swings among individual stocks.
Micron Technology shares rose 4.5% after the chip maker's latest quarterly sales and profits topped Wall Street estimates, as did the firm's projections for the current quarter. Even with the gains, the S&P 500 technology sector -- the index's best performer this year -- fell for the second straight session.
Shares of FedEx climbed 2.8%. The freight carrier raised its 2018 fiscal year projections following better-than-expected results for the most recent quarter, adding that its full-year estimates could jump if the tax overhaul passes.
Stitch Fix shares shed 11% to $22.08 after the fashion startup reported strong customer gains, but said profits were pinched by the costs of expanding into men's and plus-size apparel. The stock is still trading above its $15 initial public offering price.
Elsewhere. the Stoxx Europe 600 fell 0.7% in afternoon trading, weighed down by losses in technology and health care companies. Spain's IBEX 35 Index fell 0.1%, one day before Catalans vote for a new regional assembly in an outcome that could determine next steps for separatists in the region.
Japan's Nikkei Stock Average edged up 0.1%. Chinese equities fell, reversing some of Tuesday's gains. As China prepares to unveil its economic blueprint for 2018, people familiar with the plan say it will show that Beijing is finding it hard to cut debt without jeopardizing growth.
Kenan Machado contributed to this article.
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(END) Dow Jones Newswires
December 20, 2017 12:37 ET (17:37 GMT)