Procter & Gamble, Boeing earnings disappoint
U.S. stocks closed fractionally lower Wednesday, retreating from intraday highs after an outline of President Donald Trump's tax plan was seen as light on detail.
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The S&P 500 index , which earlier had traded briefly above its previous closing high set March 1, finished down 1.16 points, or less than 0.1%, at 2,387.45. Seven out of the S&P 500's 11 sectors finished lower ground with real-estate and consumer-staples stocks the largest decliners.
The Dow Jones Industrial Average fell 21.03 points, or 0.1%, at 20,975.09, following disappointing first-quarter earnings from Dow components, Procter & Gamble Co (http://www.marketwatch.com/story/pg-earnings-beat-expectations-but-revenue-misses-2017-04-26).(PG) and Boeing Co (http://www.marketwatch.com/story/boeing-shares-fall-premarket-after-revenue-falls-short-of-estimates-2017-04-26).(BA), with both stocks leading decliners on the benchmark.
The Nasdaq Composite Index finished down 0.27 points at 6,025.23, just short of its closing high, after touching an intraday all-time high of 6,040.89, a day after the tech-laden index surpassed the psychologically important level of 6,000 for the first time ever.
On Wednesday, Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn rolled out a one-page outline of Trump's tax-reform plan in a news conference, promising more details later.
See:Live blog and video of Trump tax plan rollout by Mnuchin and Cohn (http://blogs.marketwatch.com/capitolreport/2017/04/26/live-blog-and-video-of-trump-tax-plan-rollout-by-mnuchin-and-cohn/)
While offering a useful guide what the White House wants to do, the lack of more detail contributed to some subsequent weakness, said Nicholas Colas, chief market strategist at Convergex.
Read:Full text of Trump administration tax principles (http://www.marketwatch.com/story/full-text-of-trump-administration-tax-reform-principles-2017-04-26)
The proposal, for example, calls for a one-time tax break on "trillions of dollars held overseas," but doesn't specify the rate.
"The market was looking for more specific color on rates and the reduction of exemptions, but color on the repatriation tax, which is the single most important issue, was left unaddressed by that press conference," Colas said in an interview.
Investors had not been expecting anything other than a broad outline of the tax reform, but hoped for something with more clarity than previously vague descriptions like "massive" or "phenomenal", said Quincy Krosby, market strategist, at Prudential Financial.
Krosby noted that earnings, especially revenue growth has been underpinning the market as well as optimism about tax reform.
Read:Trump's tax reform could lift the stock-market to new heights (http://www.marketwatch.com/story/trumps-tax-reform-could-lift-the-stock-market-to-new-heights-2017-04-26)
Promises of a tax plan have been one of the linchpins of recent gains for risk assets and is likely to be a significant driver of trading action across asset classes as more details emerge.
"There's an existential problem with any kind of legislation as an investment catalyst," Convergex's Colas said. "Unlike earnings, this is not a specific event, this is a slow, grinding process that does not lend itself to being an investment catalyst."
Also in focus was a potential government shutdown this weekend. Some of those concerns, however, may have eased after Trump backed off on a demand for funding for a wall between the U.S.-Mexico border (http://www.marketwatch.com/story/trump-backs-off-demand-for-immediate-border-wall-funding-2017-04-24).
See:Should Wall Street fear a government shutdown? Here's how stocks fared in the past (http://www.marketwatch.com/story/should-wall-street-fear-a-government-shutdown-heres-how-stocks-fared-during-past-closures-2017-04-21)
Earnings season: The season continues in full swing, with a deluge of results. Shares of PepsiCo Inc.(PEP)finished down 0.7% even as earnings beat analyst forecast.
Anthem Inc.(ANTM) shares rose 3.8% after results topped expectations.
Twitter Inc. (TWTR) closed up 7.9% (http://www.marketwatch.com/story/twitter-shares-soar-after-first-quarter-earnings-beat-2017-04-26), after the social media company beat first-quarter earnings expectations.
Shares of Chipotle Mexican Grill Inc.(CMG) rose 2% after the casual restaurant chain reported first-quarter earnings ahead of forecasts late Tuesday (http://www.marketwatch.com/story/chipotle-shares-rally-6-after-companys-earnings-beat-2017-04-25).
Edwards Lifesciences Corp. (EW) shares rallied more than 10% after the medical-device maker topped Wall Street estimates for the quarter (http://www.marketwatch.com/story/edwards-lifesciences-shares-surge-on-earnings-beat-outlook-2017-04-25).
Wyndham Worldwide Corp.(WYN) shares surged 9% following its first revenue beat since the fourth quarter of 2015.
Seagate Technology PLC(STX) shares dropped nearly 17% after the data storage company's revenue for the quarter missed expectations (http://www.marketwatch.com/story/seagates-stock-pulls-back-sharply-after-revenue-miss-offsets-profit-beat-2017-04-26).
Arconic Inc. (ARNC) shares rose 1.9% after the aerospace and car maker supplier's earnings out late Tuesday topped Wall Street estimates (http://www.marketwatch.com/story/arconic-shares-rally-as-quarterly-earnings-beat-street-view-2017-04-25).
Other markets:Stocks in Asia closed mainly higher (http://www.marketwatch.com/story/asia-pacific-markets-continue-to-ride-wave-of-gains-2017-04-25), propelled by optimism over the prospect of a U.S. tax overhaul.
European markets ended higher (http://www.marketwatch.com/story/european-stocks-struggle-to-hold-onto-20-month-high-ahead-of-trump-tax-unveiling-2017-04-26), after surging to historic highs following the first round of the French presidential election on Sunday. Centrist Emmanuel Macron came out on top and will battle against far-right Marine Le Pen in the second round on May 7--a vote Macron is expected to win.
Read:Emmanuel Macron: 5 things to know about the man poised to be France's president (http://www.marketwatch.com/story/emmanuel-macron-5-things-to-know-about-the-man-poised-to-be-frances-president-2017-04-24)
Oil prices (http://www.marketwatch.com/story/oil-prices-slip-again-as-us-supply-worries-resurface-2017-04-26-11033520) settled up 0.1% to $49.62 as the U.S. Energy Information Administration' reported crude inventories declined for a third week.
Meanwhile, gold prices (http://www.marketwatch.com/story/gold-falls-for-third-session-as-dollar-firms-ahead-of-tax-plan-unveiling-2017-04-26) settled down 0.2% at $1,264.20 an ounce, but regained some ground in electronic trade.
The ICE U.S. dollar index was up 0.2% (http://www.marketwatch.com/story/dollar-finds-firm-footing-ahead-of-trump-tax-plan-details-2017-04-26) at 99.018, while Treasury yields declined (http://www.marketwatch.com/story/treasury-yields-erase-gains-as-trump-tax-plan-outlined-2017-04-26)with the yield on the 10-Year Treasury falling 2 basis points to 2.313%.
--Sara Sjolin in London contributed to this article.
(END) Dow Jones Newswires
April 26, 2017 16:29 ET (20:29 GMT)