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Stocks slip after Trump tax plan; euro softens after ECB
April 27, 2017 / 12:39 AM / 7 months ago

Stocks slip after Trump tax plan; euro softens after ECB

NEW YORK (Reuters) - A gauge of world stock markets slipped on Thursday as a three-day rally stalled in the wake of a largely expected U.S. tax cut plan, while the euro weakened after comments from European Central Bank President Mario Draghi.

On Wall Street, stocks edged higher as the Nasdaq notched the day’s best performance. Investors focussed on a stream of solid earnings reports after a lukewarm reception for U.S. President Donald Trump’s tax plan unveiled on Wednesday, as some details of the plan were largely anticipated by investors.

Corporate earnings continue to show strong results for the quarter. Comcast (CMCSA.O), up 2.1 percent, was the top boost to the benchmark S&P 500 index after reporting results.

“Most folks were expecting a build in earnings acceleration and that’s what we’ve got,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

“Despite all the economic and geopolitical noise, ultimately the market has been responding to improving earnings.”

Arone said a premium has been built into stock prices on bets of tax reform and other policies expected from the Trump administration, so “when that is in question, you see a sideways action.”

First-quarter earnings are expected to show growth of 12.4 percent, the best since 2011, according to Thomson Reuters data.

U.S. economic data showed new orders for U.S.-made capital goods rose less than expected in March, but a second straight monthly increase in shipments suggested business investment accelerated in the first quarter.

A trader works on the floor of the New York Stock Exchange shortly before the opening bell in New York, U.S., April 27, 2017. REUTERS/Brendan McDermid

The Dow Jones Industrial Average .DJI rose 6.3 points, or 0.03 percent, to 20,981.39, the S&P 500 .SPX gained 1.32 points, or 0.06 percent, to 2,388.77 and the Nasdaq Composite .IXIC added 23.71 points, or 0.39 percent, to 6,048.94.

Europe’s main bourses closed lower after falling as much as 0.5 percent as traders pulled back after a six-session winning streak on relief at the outcome of the first round of France’s presidential election and encouraging earnings.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.23 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.06 percent to edge down from a record.

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As widely expected, the ECB made no changes to its record- low interest rates or stimulus program. But euro zone government bond yields and the euro fell after Draghi said policymakers did not discuss removing the bank’s easing bias on monetary policy at this month’s meeting.

The benchmark 10-year Bund yield DE10YT=TWEB was last down almost 5 basis points at 0.303 percent. The euro EUR= was down 0.24 percent to $1.0877 against the dollar.

After weakening against the greenback on Wednesday, the Canadian dollar CAD= and Mexican peso MXN= went in opposite directions after Washington said it would not scrap the North American Free Trade Agreement (NAFTA).

The Mexican peso strengthened 0.67 percent versus the U.S. dollar at 19.05, while the Canadian dollar weakened 0.04 percent versus the greenback at 1.36 per dollar.

Oil prices renewed their slump after news that two key oilfields in Libya had restarted, pumping crude for export into an already swollen market. Brent crude is on track for its seventh decline in nine sessions.

U.S. crude CLcv1 settled down 1.3 percent at $48.97 per barrel and Brent LCOcv1 settled off 0.7 percent at $51.44 on the day.

Additional reporting by Rodrigo Campos; Editing by Dan Grebler

Our Standards:The Thomson Reuters Trust Principles.
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