NEW YORK — U.S. stocks bounced around Wednesday and finished little changed after Congress passed the Republican-sponsored tax bill. Smaller companies fared the best.
The Senate narrowly passed the tax bill after midnight and the House, which passed a similar bill Tuesday but had to go back and make changes, followed suit in the afternoon. President Donald Trump is expected to sign the bill soon.
Smaller companies climbed, as they might benefit the most from the corporate tax cut. Bond yields rose, which hurt companies that pay big dividends, including utilities and household goods makers.
Stocks have jumped over the last four weeks as the tax legislation moved closer to passing, but they haven’t done much over the last two days as Congress voted on the bill. Stocks set all-time highs Monday and slipped on Tuesday.
It’s been a very strong year for the market, and ordinarily investors might sell some of their holdings in late December and take some profits before they make new investments in January. But with a tax bill passing at the very end of the year, TD Ameritrade Chief Market Strategist JJ Kinahan said that pattern might not hold.
“This could be a year where you see the selling pressure at the beginning of the year because people are delaying their selling, waiting for a better tax environment,” he said. “There are always unintended consequences with tax plans.”
The Standard & Poor’s 500 index lost 2.22 points, or 0.1 percent, to 2,679.25. The Dow Jones industrial average fell 28.10 points, or 0.1 percent, to 24,726.65. The Nasdaq composite slid 2.89 points, or less than 0.1 percent, to 6,960.96. The Russell 2000 index of smaller-company stocks rose 3.33 points, or 0.2 percent, to 1,540.08.
Investors have sent stocks higher in recent weeks as the tax bill’s prospects improved. It would cut the corporate tax rate to 21 percent from 35 percent, which could increase corporate profits. Other provisions are intended to encourage companies to invest more money in their businesses.
In a note earlier this week, after the bill was largely complete, Barclays analyst Maneesh Deshpande said the bill will reduce the effective tax rate for S&P 500 companies to 20.7 percent from 26 percent because of changes taxation for profits made overseas. He said household goods companies, banks and industrial companies will get the largest tax cuts, while technology and health care companies won’t see as much of a difference.
FedEx raised its annual profit forecast after saying its holiday season is off to a strong start. FedEx also said the tax bill could boost its profit this year by $4.40 to $4.50 a share because of changes in its deferred tax liabilities as well as a reduced tax rate. Its stock climbed $8.53, or 3.5 percent, to $251.07.
AT&T said it will pay $1,000 bonus to 200,000 of its U.S. employees as the bill passed. The company said last month that it would invest $1 billion domestically if the measure was adopted. On Wednesday its stock rose 50 cents, or 1.3 percent, to $38.55.
Bond prices fell further. The yield on the 10-year Treasury note rose to a nine-month high of 2.49 percent from 2.46 percent. When yields rise, it’s good for banks because they can charge higher interest rates on mortgages and other kinds of loans.
Energy companies climbed with oil prices. Benchmark U.S. crude rose 53 cents to $58.09 a barrel in New York. Brent crude, used to price international oils, added 76 cents, or 1.2 percent, to $64.56 a barrel in London.
Wholesale gasoline rose 4 cents to $1.74 a gallon. Heating oil stayed at $1.94 a gallon. Natural gas fell 6 cents to $2.64 per 1,000 cubic feet.
Clothing styling service Stitch Fix plunged $2.42, or 9.8 percent, to $22.34 after the company reported its results for the first time since it went public in November. Stitch Fix did about as well as investors expected, but said its profit margins decreased because of its newer men’s and plus size clothes. Shipping costs increased and it had fewer products available in distribution centers.
Philip Morris International sank after Reuters reported that some of the employees who have worked on clinical studies of the company’s iQOS device, which heats tobacco without burning it, have questions about the quality of that research. The company has spent years working on iQOS and asked the Food and Drug Administration to approve it at the end of 2016 based in part on those trials.
The stock fell $2.68, or 2.5 percent, to $104.37.
Gold rose $5.40 to $1,269.60 an ounce. Silver climbed 12 cents to $16.28 an ounce. Copper added 4 cents to $3.20 a pound.
Bitcoin futures turned sharply lower. On the CME, the price dropped $1,425, or 7.8 percent, to $16,775.
The dollar rose to 113.42 yen from 112.94 yen. The euro edged up to $1.1879 from $1.1845.
Germany’s DAX dropped 1.1 percent and the French CAC 40 dipped 0.6 percent. In Britain, the FTSE 100 fell 0.3 percent. Japan’s Nikkei 225 rose 0.1 percent. The South Korean Kospi lost 0.3 percent. The Hang Seng in Hong Kong slipped 0.1 percent.
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