* S&P 500 earnings continue to trend higher
* Deficit hawks could be a hurdle for tax plan
* Advancers outpace decliners on NYSE, Nasdaq
* Dow off 0.1 pct, S&P down 0.05 pct, Nasdaq flat
(Updates to close, changes comment, byline)
By Rodrigo Campos
New York, April 26 U.S. stocks ticked lower on
Wednesday following two sessions of strong gains as strong
corporate earnings were offset by uncertainty over the
feasibility of a proposed business tax cut.
The proposal from the Trump administration slashes tax rates
for businesses and on overseas corporate profits returned to the
country. It offered no specifics on how it would be paid for
without increasing the deficit.
"A lot to digest on the tax side and to be honest we don’t
have a lot of details at this point aside from just a few bullet
points from the press conference," said David Lefkowitz, senior
equity strategist at UBS Wealth Management Americas in New York.
"This is going to be a bit of an uphill fight to get this
plan enacted into law."
The expectation of a corporate tax cut was partly behind the
rally in U.S. stocks since the November election of Donald
Trump. The market stalled over the last several weeks as the
administration has failed to score a major legislative victory,
Republican majorities in the House and Senate notwithstanding.
The S&P 500 traded above its record closing high throughout
the day, however. Some analysts say even though tax reform would
be a major boost to stocks, economic and earnings growth are
enough to support current market levels.
Overall profits of S&P 500 companies are estimated to have
risen 11.8 percent in the first quarter, the most since 2011,
according to Thomson Reuters I/B/E/S.
The Dow Jones Industrial Average fell 21.03 points,
or 0.1 percent, to 20,975.09, the S&P 500 lost 1.16
points, or 0.05 percent, to 2,387.45 and the Nasdaq Composite
dropped 0.27 point to 6,025.23.
Despite the tick lower, advancing issues outnumbered
declining ones on the NYSE by a 1.37-to-1 ratio; on Nasdaq, a
1.62-to-1 ratio favored advancers.
The tax proposal includes a cut on so-called pass-through
business taxes that would deliver a windfall to investors in
MLPs, master limited partnerships.
Among stocks, United Technologies rose 1.1 percent
to $118.20 and provided the biggest boost to the Dow industrials
after reporting a quarterly profit that beat expectations helped
by higher sales in all four of its business units.
"Earnings are very strong, you could see a 15 percent
year-on-year growth on the S&P," said Paul Zemsky, chief
investment officer, Multi-Asset Strategies and Solutions at Voya
Investment Management in New York.
"We're seeing a global, synchronized up swing."
On the flip side, Boeing shares fell about 1 percent
to $181.71 after the planemaker reported a decline in revenue.
The S&P 500 posted 82 new 52-week highs and 3 new lows; the
Nasdaq Composite recorded 210 new highs and 28 new lows.
About 7.33 billion shares changed hands in U.S. exchanges,
compared with the 6.44 billion daily average over the last 20
(Reporting by Rodrigo Campos, additional reporting by Chuck
Mikolajczak; Editing by Chizu Nomiyama)