Tech stocks tug Wall Street lower; investors fret about U.S. tax cut delays

Tech stocks tug Wall Street lower; investors fret about U.S. tax cut delays
(Reuters) – Wall Street stocks dropped on Thursday, weighed down by losses in Microsoft and other technology issues, as investors turned their attention to a U.S. Senate Republican plan that would delay expected corporate tax cuts.

The S&P 500 index has surged about 21 percent since the election of President Donald Trump a year ago, fueled by his promises to cut corporate taxes and other business-friendly measures.

Senate Republicans are unveiling a tax proposal that differs markedly on corporate, business and individual tax cuts from legislation detailed by their counterparts in the House of Representatives, Republican aides said.

The Senate proposal delays a corporate tax rate cut to 20 percent by a year and provides small-business owners with a deduction rather than a special business rate, said the aides.

Earlier on Thursday, uncertainty about the future of corporate tax rates pushed the S&P 500 down as much 1.0 percent, underscoring how much Wall Street is banking on a tax reduction., but the selloff was brief and stocks quickly recovered much of the dip.

The S&P 500 is trading at 18 times expected earnings, expensive compared with its 10-year average of 14.3, according to Thomson Reuters Datastream. Cutting corporate taxes would boost earnings and make stocks relatively less expensive.

“It’s been a year since the election. We’ve gone up 22 percent on hopes of what the Trump agenda would bring, and while they’re trying to work toward this thing, they haven’t really
Tech stocks tug Wall Street lower; investors fret about U.S. tax cut delays