Dow closes at another record high on a busy day
Wall Street was fixated Tuesday on both the House Republicans' tax overhaul proposals and a disappointing round of company results. Plus, as expected, President Donald Trump nominated Jerome Powell as the next Federal Reserve chair.
When the day's regular trading ended, the blue-chip Dow Jones Industrials index had outrun the other major benchmarks and set yet another new record high, closing up 0.35 percent for the day, or 81 points, to end at 23,516.
But the broad-market S&P 500 and tech-heavy Nasdaq both closed near unchanged, up 0.5 points and down 1.6 points, respectively.
Homebuilders fell after Republicans proposed to limit a popular tax deduction on mortgage interest. Toll Brothers (TOL) tumbled 6.1 percent.
Rubbermaid owner Newell Brands (NWL) plunged 27 percent Thursday and generic-drug maker Teva Pharmaceutical Industries (TEVA) dropped 20 percent. Both cut their annual forecasts following weak third-quarter reports.
In a research note regarding the GOP House tax plan, analysts at Jefferies Equity Research said, "The degree to which stocks price in tax reform is debatable. The multiple for the S&P 500 has risen about 8% since the election, but earnings are growing again, and the earnings benefit of reform likely outpaces the multiple expansion we've witnessed."
They also noted that "The sectors and stocks likely to see the biggest boost from tax reform are often not the sectors that have performed best since the election, and that may create an opportunity."
Regarding President Trump's nomination of Powell to lead the Fed, Michael Gapen of Barclays Research said in a note that given Powell has been a Fed colleague of Janet Yellen's for more than five years and has helped formulate the central bank's current stance, "We expect the monetary policy reaction function to be little changed on several fronts."
