Wall Street drifts lower; investors worry about tax cut delay

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Wall Street drifted lower on Monday as investors worried that President Donald Trump's plan to cut taxes and boost the economy could take longer than previously expected. The U.S. stock market has been on a record-setting spree since the election of Trump as president, but the rally has faltered in recent weeks as investors fret about a lack of clarity on his proposals to reform taxes and cut regulation. The S&P 500 and the Dow ended lower after FBI Director James Comey told a congressional hearing he had seen no evidence to support a claim by Trump that former President Barack Obama had wiretapped his campaign headquarters in Trump Tower in New York. His unsubstantiated tweet distracted from the claims of Russian interference in the election - as well as efforts by Republicans to push through a healthcare overhaul. "It's just one more day delaying talking about policy," said Ian Winer, director of trading at Wedbush Securities in Los Angeles. "The market wants tax reform, and you need to get healthcare done before you get tax reform." The SPDR S&P Retail ETF (XRT) fell 1.5 percent, all but erasing its gains since Trump's election as investors fretted that a border adjustment tax being pushed by Republicans in Congress would lead to higher prices for consumer products. The S&P 500 is unchanged from a week ago, but since the presidential election on Nov 8, it has surged 11 percent, heightening concerns about valuations. The S&P 500 is trading at nearly 18 times expected earnings, compared with a 10-year average of 14, according to Thomson Reuters Datastream.

The Dow Jones Industrial Average . DJI inched down 0.04 percent to end at 20,905.86 points, while the S&P 500 . SPX lost 0.20 percent to 2,373.47. The Nasdaq Composite . IXIC edged up 0.01 percent to finish at 5,901.53 after briefly hitting an intraday record high. Seven of the 11 major S&P sectors were lower, with the financial index's . SPSY 0.9 percent fall leading the decliners. Oil fell as investors continued to unwind bets on higher prices.

The U.S. Federal Reserve's conservative rate guidance is also keeping the market in check. A host of Fed officials are scheduled to speak this week, including Chair Janet Yellen on Thursday. The Fed is on track to raise interest rates twice more this year and it could be more or less aggressive depending on inflation and fiscal policies from the Trump administration, Chicago Fed President Charles Evans said on Monday. Last week, the central bank raised interest rates for the first time this year but stuck to its outlook for two more hikes this year, instead of three expected by the market.

China prepares to counter any U.S. trade penalties: sources BEIJING China's government has been seeking advice from its think-tanks and policy advisers on how to counter potential trade penalties from U.S. President Donald Trump, getting ready for the worst, even as they hope for business-like negotiations.

Fed on track to raise U.S. rates twice more this year: Evans NEW YORK The Federal Reserve is on track to raise interest rates twice more this year after a policy tightening last week, and it could be more or less aggressive depending on inflation and fiscal policies from the Trump administration, a Fed rate-setter said on Monday.

Credit card applications drop at Wells Fargo in February NEW YORK Wells Fargo & Co saw a drop in consumers opening checking and credit card accounts in February, the bank said on Monday, marking the sixth straight month of decline since a sales scandal rocked the bank last year.