MARKET SNAPSHOT: Dow Struggles To Return To Record Territory As Tax Plan Nears Final Approval

By Sara Sjolin and Anora M. Gaudiano, MarketWatchFeaturesDow Jones Newswires

FedEx rises after earnings

Stock-market indexes were trading virtually unchanged on Wednesday, relinquishing modest opening gains as congressional Republicans were on the verge of sending a tax bill to President Donald Trump.

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What are stock indexes doing?

The Dow Jones Industrial Average , which was up as much as 80 points shortly after the open, last traded nearly flat at 24,771. The blue-chip index is up more than 25% since the start of the year.

The S&P 500 was flat at 2,681, with seven of the 11 main sector trading higher. Consumer staples and technology stocks were leading the decliners, but were offset by gains from telecoms, energy and industrials.

The Nasdaq Composite Index slipped 13 points, or 0.2%, to 6,950.

What's driving the market?

It's all about tax cuts. The House of Representatives on Tuesday passed a historic tax bill that includes a reduction in the corporate tax rate from 35% to 21%, sending it on for approval in the Senate. The Senate passed the overhaul early on Wednesday (, but some minor provisions that break budget rules forced lawmakers to strip them out, requiring the House to vote again.

House leaders have scheduled a new tax vote for Wednesday morning.

Hopes for tax cuts have boosted markets globally in recent weeks, partly because the package is seen as benefiting businesses and providing a boost to the economy.

What are strategists saying?

"The stock market is still supported by fundamentals, such as earnings and the economy. FedEx earnings last night, for example, confirmed that consumers are spending at healthy levels," said Diane Jaffee, senior portfolio manager at TCW.

"We expect the market to pause in January and sort the companies into winners and losers of the tax legislation, but ultimately continue to climb thanks to revenue and earnings growth," Jaffee said.

"While it's debatable who the real beneficiaries of the bill will be, stock markets have clearly benefited in anticipation of it, with major corporations being among the big winners of the bill," said Craig Erlam, senior market analyst at Oanda in a note.

"With equity markets having risen more than 25% since Trump's election victory, at least in part due to his tax reform plans, it's likely that this is almost entirely priced in at this point so it will be interesting to see whether the rally can now be maintained until the end of the year, or whether the Santa rally will instead grind to a premature halt as investors lock in some profits," he added.

What stocks are in focus?

Shares of FedEx Corp.(FDX) advanced 3.4% after the package-delivery giant late Tuesday reported second-quarter results that beat Wall Street expectations (

Chip company Micron Technology Inc.(MU) climbed 4.8% after late Tuesday reporting earnings that surpassed forecasts (

On the downside, Stitch Fix Inc.(SFIX) plunged 13% after the online clothing retailer late Tuesday reported earnings that topped forecasts, but the result did't reflect the "blowout quarter" bulls were hoping for (

Red Hat Inc.(RHT) lost 3.9%, brushing off better-than-expected earnings ( out late Tuesday.

Ahead of the bell on Wednesday, BlackBerry Ltd. (BB.T) reported revenue and profit that topped expectations, sending shares 11% higher.

General Mills Inc.(GIS) also reported revenue that beat forecasts and its shares were up 1.5%.

What's new on the economic front?

Existing-home sales ( to a 5.81 million seasonally adjusted annual rate in November, the National Association of Realtors said Wednesday. The number came in well above expectations.

What are other markets doing?

Asian stock markets closed mixed (, while European markets mainly were lower (

Oil ( and gold ( were both higher, while the ICE U.S. Dollar Index was flat around 93.469. The yield on the 10-year Treasury note rose 2 basis points to 2.49%, the highest level since March.

Bitcoin futures ( slid 2.6% to $17,725.

(END) Dow Jones Newswires

December 20, 2017 11:29 ET (16:29 GMT)