Stocks Climb Off Worst Levels But Close Firmly Negative

Stocks climbed off their worst levels of the day but still ended Thursday’s trading firmly in negative territory. With the drop on the day, the major averages pulled back off the record closing highs set in the previous session.

The major averages more than offset the modest gains posted on Wednesday. The Dow fell 101.42 points or 0.4 percent to 23,461.94, the Nasdaq slid 39.07 points or 0.6 percent to 6,750.05 and the S&P 500 dropped 9.76 points or 0.4 percent to 2,584.62.

The weakness on Wall Street came as traders reacted to reports regarding the Senate version of tax reform legislation.

The proposed bill has several key differences with the House version, including a delay in the implementation of the cut in the corporate tax rate.

The Senate bill still reduces the corporate tax rate to 20 percent from 35 percent, although the new rate does not take effect until 2019. The House bill would start the 20 percent rate next year.

The delay of the corporate tax cut in the Senate bill reflects an effort by Senators to partly offset the cost of the legislation.

The Senate bill also maintains seven tax brackets versus the four in the House bill, but the top rate is lowered to 38.5 percent from 39.6 percent.

While state and local tax deductions are completely repealed in the Senate version, the bill maintains the cap on the mortgage interest deduction at $1 million.

On the U.S. economic front, the Labor Department released a report showing a bigger than expected increase in initial jobless claims in the week ended November 4th.

The report said initial jobless claims climbed to 239,000, an increase of 10,000 from the previous week’s unrevised level of 229,000. Economists had expected jobless claims to edge up to 231,000.

A separate report from the Commerce Department showed wholesale inventories rose by 0.3 percent in September, matching economist estimates.

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