Industrial Shares Dip on Trump Economic Agenda Fears - Industrials Roundup

Shares of manufacturing and transportation companies declined amid fears about the outlook for the Trump administration's agenda. Three former operatives linked to President Donald Trump's campaign faced criminal actions as part of Special Counsel Robert Mueller's investigation into Russian meddling in the U.S. election. The scandal swirling around the Trump administration could weaken his hand in negotiations on getting his tax-reform package through congress. One strategist said some proposals may stand a better chance of passage than others. "The most controversial aspects of tax reform are focused on possible changes to individual tax rates (such as arguments over the deductibility of state and local taxes)," said Bob Doll, chief investment strategist at money manager Nuveen Investments, in a note to clients. "In contrast, corporate tax reform appears less controversial, as Congress seems to have broad agreement on the need to reduce corporate taxes and solve the issue of overseas profits. While still a small probability, Republicans may choose to separate the two issues and proceed solely on a corporate tax bill." One brokerage said there are signs that corporations plan on putting more capital back into their businesses. "A cyclical, more durable pickup in equipment investment [may be] under way, particularly as higher labor costs in the US have incentivized businesses to turn back to capex versus adding labor," said analysts at brokerage Morgan Stanley, in a research note.

-Rob Curran, rob.curran@dowjones.com

(END) Dow Jones Newswires

October 30, 2017 16:39 ET (20:39 GMT)