Wall Street pulled back from record-high territory on Monday, weighed down by a drop in Merck shares, as investors assessed President Donald Trumpâs plan for corporate tax cuts.
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U.S. stocks extended losses after a Bloomberg report that the House of Representatives was discussing a gradual phase-in for a corporate tax cut that Trump and his fellow Republicans favor.
Investors were also digesting the impact to Trumpâs agenda from news that his former campaign manager, Paul Manafort, was charged with money laundering in the federal probe into Russian meddling in the 2016 presidential election.
âA lot of people are looking to that corporate tax cut as a reason for the next leg up in stocks,â said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
âWe are in a market that has just been on an absolute low-volatility, steady climb for quite a while, so you donât need much of a reason for it to take a periodic step back, particularly a small step back,â Meckler said.
The Dow Jones Industrial Average fell 72.95 points, or 0.31 percent, to 23,361.24, the S&P 500 lost 8.39 points, or 0.33 percent, to 2,572.68 and the Nasdaq Composite dropped 10.78 points, or 0.16 percent, to 6,690.48.
The tech-heavy Nasdaq touched an intraday record high earlier in the session before pulling back.
The S&P tech sector .SPLRCT rose 0.2 pct, following big gains on Friday in the wake of a strong batch of earnings.
Apple (NASDAQ:AAPL) shares gained 2.1 percent after analysts pointed to strong demand for the iPhone X.
Merck shares fell 5.6 percent after a setback to its key cancer medicine. The stock was among the top drags on the S&P 500 and Dow industrials.
In other corporate news, Japanâs SoftBank Group Corp is planning to break off negotiations on a merger between subsidiary Sprint Corp (NYSE:S) and T-Mobile US (NASDAQ:TMUS) according to a Nikkei report. Sprint shares fell 9.7 percent and T-Mobile was off 4.6 percent.
Market watchers readied for another heavy week of corporate results. With more than half the S&P 500 reported, third-quarter earnings are expected to have climbed 6.7 percent, up from an expectation of 5.9 percent at the start of October, according to Thomson Reuters I/B/E/S.
Investors were also awaiting Trumpâs pick to head the Federal Reserve. Trump is likely to choose Fed Governor Jerome Powell to replace Janet Yellen as head of the U.S. central bank, a source familiar with the matter said on Monday.
Declining issues outnumbered advancing ones on the NYSE by a 1.61-to-1 ratio; on Nasdaq, a 2.27-to-1 ratio favored decliners.