Technology sector, down 1.5%, takes it on the chin
U.S. stocks lost ground Thursday, pulling back sharply from all-time highs as investors expressed disappointment over news that Senate Republican's tax plan would include a delay of cuts to corporate taxes to 20% from 35% until 2019.
What are stock indexes doing?
The S&P 500 fell 24 points, or 1%, to 2,569, with nine of the 11 main sectors trading lower. Technology stocks led losses, down 1.7%. The FANG+ futures of 10 stocks that include the largest technology companies were down 1.5%.
The Nasdaq Composite Index slid 90 points, or 1.3%, to 6,699.
The Dow Jones Industrial Average fell 229 points, or 1%, to 23,329. If the equity benchmarks close at these levels, the percentage declines would represent the steepest single-session drop in nearly three months.
A popular measure of implied volatility, as measured by the CBOE Volatility index , soared as much as 20% to 11.73, still below its historic average at around 19, but pointing to elevated levels of market anxiety.
What's driving the market?
On Thursday, Politico reported (https://www.politico.com/story/2017/11/09/senate-tax-bill-2017-244743)that the Senate's tax proposal is expected to delay a cut in the corporate rate until 2019, running counter to President Donald Trump's expectations for an immediate reduction in corporate taxes and disappointing investors already skeptical that legislation will be passed this year.
Hopes that Trump's administration would deliver a major U.S. tax overhaul--including a business-friendly tax cut--have boosted markets recently.
See:How the Republican tax plan would affect homeowners and buyers (http://www.marketwatch.com/story/trump-claims-hed-be-big-loser-from-tax-plan-how-the-senates-bill-may-differ-from-houses-2017-11-08)
The Federal Reserve isn't factoring the tax bill into its monetary policy forecasts because it is unclear still what will and won't be included, Cleveland Fed President Loretta Mester said on CNBC Thursday morning. "I need to see more of the details," she said. Mester isn't a voting member of the central bank's Federal Open Market Committee this year.
The tax bill written by House Republicans would boost the U.S. deficit by $300 billion more (http://www.marketwatch.com/story/cbo-says-tax-bill-would-increase-deficit-by-17-trillion-2017-11-08) than lawmakers estimated, the Congressional Budget Office said Wednesday. And over a decade, it would increase the deficit by $1.7 trillion, beyond the $1.5 trillion required to meet Senate rules under the recently passed budget.
Read:1 in 5 would see tax hike in a decade under Republican bill, congressional analysis finds (http://www.marketwatch.com/story/one-in-five-would-see-tax-hike-in-a-decade-under-republican-bill-congressional-analysis-finds-2017-11-07).
What are strategists saying?
"There is a lot of division among Republicans in the Congress, especially between those who come from states whose constituents stand to lose under the current proposal. Investors are worried that the tax bill will be delayed," said Mark Kepner, managing director of sales and trading at Themis Trading
Which stocks are in focus?
Roku Inc.(ROKU) shares soared 44%. The video-streaming company in its first earnings report as a public company late Wednesday, posting profit and revenue that both beat forecasts (http://www.marketwatch.com/story/here-are-the-numbers-that-sent-roku-stock-soaring-after-its-first-earnings-report-2017-11-08).
Kohl's Corp. (KSS) shares tumbled 6.1% after lowering its 2018 earnings outlook and reporting quarterly profit that was slightly weaker than expected, though earnings exceeded estimates.
Office Depot Inc. (ODP) shares jumped 7.3% after the firm reported quarterly results that were better than expected (http://www.marketwatch.com/story/office-depot-beats-estimates-despite-hurricane-impact-2017-11-09).
Sage Therapeutics Inc. shares surged 42% after the company said its postpartum-depression therapy (http://www.marketwatch.com/story/sage-therapeutics-stock-surges-50-on-positive-trial-results-in-postpartum-depression-2017-11-09) has positive results in two late-stage clinical trials.
Shares of Vista Outdoor Inc. (VSTO) dropped 28% after the gun and outdoor-sports-products company beat fiscal second-quarter profit expectations (http://www.marketwatch.com/story/vista-outdoors-stock-tumbles-after-sales-miss-and-slashed-outlook-offsets-profit-beat-2017-11-09), but missed on sales and slashed its full-year outlook.
D.R. Horton Inc.(DHI) stock rose 2% after beating profit and sales forecasts.
Shares of Macy's Inc.(M) rose 4.5% as the retailers earnings came ahead of expectations.
After the market closes, results from Walt Disney Co.(DIS), Nordstrom Inc.(JWN) and Nvidia Corp.(NVDA) are slated to release earnings. News Corp.(NWS.AU)--the owner of MarketWatch--is also on the earnings docket after hours.
Disney earnings preview:It's a transition period for the media and entertainment company (http://www.marketwatch.com/story/disney-earnings-its-a-transition-period-for-the-media-and-entertainment-company-2017-11-01)
Shares of Snap Inc.(SNAP) fell 4.6% after a 15% loss posted on Wednesday that came after the company posted disappointing quarterly results (http://www.marketwatch.com/story/snaps-stock-sinks-as-disappointing-results-outweigh-large-tencent-stake-2017-11-08).
Opinion:The outlook for Snap isn't as gloomy as the stock market suggests (http://www.marketwatch.com/story/the-death-of-snap-is-being-greatly-exaggerated-2017-11-08)
Perrigo Co. PLC(PRGO) jumped 10% after the health-products maker reported better-than-expected earnings.
What's on the economic calendar?
Weekly jobless claims (http://www.marketwatch.com/story/four-week-jobless-claims-average-falls-to-lowest-level-since-march-1973-2017-11-09)for the week ended Nov. 4 rose by 10,000 to 239,000, but the more stable monthly average of claims decreased by 1,250 to 231,250 to the lowest level since March 1973.
See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
What are other markets doing?
Asian markets closed mixed, with Japan's Nikkei 225 index turning a 2% gain at midday into a 0.2% loss by the close.
European markets swung lower (http://www.marketwatch.com/story/european-stocks-head-for-3rd-loss-as-burberry-plunges-2017-11-09), with the Stoxx Europe 600 index down 0.8% at the latest.
Crude-oil prices (http://www.marketwatch.com/story/oil-prices-steady-near-2-year-high-as-geopolitics-stir-supply-concerns-2017-11-09) and gold were trading higher, while the ICE Dollar Index slumping 0.4% to 94.43.
--Mark DeCambre contributed to this article
(END) Dow Jones Newswires
November 09, 2017 12:50 ET (17:50 GMT)