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