US: Stocks retreat as tax debate enters 'hard part'

[NEW YORK] Wall Street stocks pulled back on Friday amid skepticism over the prospects for a US tax cut, as Apple dipped after delaying the release of its anticipated HomePod speaker programme.

The House of Representatives, as expected on Thursday approved its version of the tax reform legislation, while a key Senate panel cleared a different version.

Analysts were girding for a much tougher battle in the upper chamber of Congress.

Treasury Secretary Steven Mnuchin predicted Friday that a final tax plan would reach President Donald Trump's desk by Christmas, but observers said that time-frame would be tough.

The battle for tax reform moves to "the hard part," said Oxford Economics. "The hurdles get higher from here as the Senate will have a tougher time than the House did in passing legislation." The Dow Jones Industrial Average dropped 0.4 per cent to close the week at 23,358.24, its second straight losing week.

The broad-based S&P 500 lost 0.3 per cent to end at 2,578.85, also below last week's close, while the tech-rich Nasdaq Composite Index shed 0.2 per cent to 6,782.79.

Apple dipped 0.6 per cent after pushing back the launch of its HomePod, a rival to Amazon's Alexa-powered devices and Google Home, until 2018, meaning it will miss the key holiday shopping season.

Twenty-First Century Fox shot up 6.6 per cent as a person familiar with the matter said Comcast, Verizon and Sony are circling possible acquisitions of the film and television assets from Rupert Murdoch's media empire. Comcast lost 2.5 per cent, while Verizon gained 1.5 per cent. US shares of Sony added 0.2 per cent.

Nike was the biggest winner in the Dow, surging 3.4 per cent after boosting its dividend by 11 per cent. The sneaker and sports apparel maker also benefited from a strong earnings report from Foot Locker, which rocketed up 28.3 per cent.

Other retail earnings were mixed, with Gap winning 7.0 per cent and Williams-Sonoma slumping 13.4 per cent.

Homebuilder stocks advanced after government data showed housing starts rose a strong-than-expected 13.7 per cent in October. KB Home, Lennar and PulteGroup all climbed more than one per cent.

AFP