(FinancialPress) — Tuesday saw Wall Street stumble, as Walt Disney Co. (DIS.N) shares took a dip and the tech sector rebound started losing intensity. Another factor at play was the reaction of investors towards effects on corporate earnings to come from the recently-approved Republican U.S. tax overhaul .
The session close marked the third in a row in the negative for the S&P 500. This had not happened since the beginning of August. Overall, this adjusts the index’s rise for the year to 17%.
The S&P 500 technology index saw a 0.21% rise, mostly propelled by a 2,53% increase in Electronic Arts Inc (EA.O) stock.
Over the past week, the hottest sector of 2017 has dropped about 4% in value. Investors are moving their money to banks, retailers and other hopeful-to-be-benefitted stocks on the heels of President Trump‘s promised tax cuts.
A last minute change of the bill that was passed by Republican senators on Saturday included the re-inclusion of the corporate alternative minimum tax into the document. It had previously been removed from the draft.
The move has put Republicans in the Senate and in the House of Representatives at odds, as the latter had already repealed the corporate AMT in their version of the tax bill and are now campaigning for it to be eradicated in the final version of the law. Keeping it would potentially negate parts of the bill that are geared to benefit corporations and tech companies. ‘
Lindsay Bell, investment strategist for CFRA Research, said that “Sentiment still remains that tax reform will get done and we will get a 20 percent tax rate, and that will boost earnings significantly.“ She added that a tax rate cut of the sort could potentially propel the S&P 500 to earn an extra 9% in 2018.
The NASDAQ, DJIA and SP500 dropped considerable as the day‘s session winded down. ‘
Frank Gertz, analyst for Wellington Shields & Co. of New York, said that “You don’t want things to slip away at the end of the year, so it’s tempting to take things off the table, maybe buy something that’s been beaten up.“