Following the pullback seen in the previous session, stocks are seeing further downside in morning trading on Friday. With the drop on the day, the major averages are pulling back further off Wednesday’s record closing highs.
Currently, the major averages are posting modest losses. The Dow is down 50.36 points or 0.2 percent at 23,411.58, the Nasdaq is down 17.68 points or 0.3 percent at 6,732.38 and the S&P 500 is down 7.21 points or 0.3 percent at 2,577.41.
The weakness on Wall Street is partly due to uncertainty about the outlook for tax reform after Senate Republicans released their version of a tax bill.
The Senate bill includes some significant differences from the House version, including a delay in the implementation of a cut in the corporate tax rate.
While the Senate version still reduces the corporate tax rate to 20 percent from 35 percent, the new rate would not take effect until 2019. The House bill would start the 20 percent rate next year.
A number of other differences related to issues such as deductions and the estate tax have raised some questions about the outlook for tax reform.
House Republicans could pass their version as early as next week, although it remains to be seen if GOP lawmakers can overcome the differences in the two bills to get legislation to the president’s desk.
Selling pressure may also have been generated in reaction to a report from the University of Michigan showing a bigger than expected pullback in consumer sentiment in the month of November.
The report said the preliminary reading on the consumer sentiment index for November came in at 97.8 compared to the final October reading of 100.7. Economists had expected the index to dip to 100.0.
The bigger than expected decrease by the consumer sentiment index came after it surged up to a thirteen-year high in October.
Biotechnology stocks are seeing considerable weakness in morning trading, resulting in a 1.2 percent drop the NYSE Arca Biotechnology Index. The index is on pace to end…