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US: Wall Street ends lower as tax bill haggling continues
[NEW YORK] Wall Street finished lower on Tuesday following a late-day selloff as investors continued to mull how an overhaul of the US tax code could affect corporate earnings.
The topsy-turvy trading day came as a federal agency warned of mounting risks of a sudden drop in stocks and bonds that could hit economic growth.
The blue-chip Dow Jones Industrial Average fell 0.5 per cent to close at 24,180.64, while the broader S&P 500 gave up 0.4 per cent to finish at 2,629.57.
After recovering somewhat in the morning from Monday's tech sell-off, the Nasdaq gave up 0.2 per cent to end the session at 6,762.21.
Amid the uncertainty over the sweeping tax overhaul, the Senate version adopted Saturday reinstates an alternative minimum tax for corporations that the House of Representatives had done away with.
Eliminating the AMT could be seen as beneficial to the tech sector and senior House lawmakers told CNBC on Tuesday they were dismayed by the change.
The House and Senate still must reconcile their different versions of the tax package, and Maris Ogg of Tower Bridge Advisors, said the current "wait-and-see mode" on Wall Street will shift only when there are clear signs of progress from Congress.
"Every time you get good news it reacts, and when there is no news or bad news, you just tread water," she told AFP.
Meanwhile, the Treasury Department's Office of Financial Research - an agency that monitors market and financial system stability - warned of mounting danger that stocks and bonds could see a "large correction."
Market risks are "high and continue to rise," the report said, noting that cyclically adjusted, the S&P's price-earnings ratio is in the 97th percentile relative to the last 130 years.
Shares in Disney fell 2.7 per cent following reports it is in talks to buy much of the media assets of 21st Century Fox, whose shares also fell 0.3 per cent.
Meanwhile, oil stocks suffered despite a higher close for crude in New York, which added 15 cents to settle at US$57.62. Exxon Mobil fell 0.7 per cent while Chevron gave up 0.4 per cent and Royal Dutch Shell lost 0.3 per cent.
Baker Hughes saw its debt rating lowered by S&P Global Ratings to "A-" from "A+" amid reports General Electric could sell off its oil services company. The company's share price lost 2.8 per cent.