December 20, 2017 / 4:39 PM / a month ago

US STOCKS-Wall St takes a breather as tax bill nears passage

* Tax bill moves closer to being signed into law

* Philip Morris falls after Reuters report of iQOS irregularities

* FedEx up on results, says new tax code to boost results

* Indexes down: Dow 0.03 pct, S&P 0.11 pct, Nasdaq 0.31 pct (Changes comment, adds details, updates prices)

By Sruthi Shankar

Dec 20 (Reuters) - U.S. stocks edged lower on Wednesday as the long-awaited tax bill was all but assured of becoming law, allowing investors to take a breather after a month-long rally in anticipation of the largest overhaul of the U.S. tax code in 30 years.

The bill was approved on a 51-48 vote, but was sent back to the House of Representatives for a re-vote by the Senate due to a procedural snag. It is expected to be passed.

The proposed changes include cutting the corporate tax rate to 21 percent from 35 percent from Jan. 1, which is expected to boost company earnings and lead to higher dividends and stock buybacks for investors.

The S&P 500 has climbed about 4.5 percent since mid-November when the House passed its tax overhaul bill, led by a rally in sectors such as transport and banks that are expected to benefit the most from lower taxes.

“We rallied a lot on sort of a non-event and I think there is a little bit of head scratching about what’s really new that we should be rallying on,” said said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

“There is no news to take us higher in terms of stocks, part of it could be rotation out of bonds and maybe some nibbling at stocks that perhaps people think will perform well in 2018.”

At 10:58 a.m. ET (1558 GMT), the Dow Jones Industrial Average was down 8.01 points, or 0.03 percent, at 24,746.74 and the S&P 500 was down 3.07 points, or 0.11 percent, at 2,678.4.

The Nasdaq Composite was down 21.43 points, or 0.31 percent, at 6,942.42.

U.S. Treasury yields hit nine-month highs on optimism the tax overhaul will boost growth and as home construction data supported the view of strong fourth-quarter economic growth.

Eight of the 11 major S&P sectors were higher, led by a 0.68 percent rise in telecoms, considered by some analysts to be the biggest beneficiary of lower taxes.

AT&T gained 1.8 percent and Verizon 0.9 percent.

The Dow Jones Transport Index rose 0.69 percent crossing 10,600 points for the first time ever, helped by a surge in FedEx.

FedEx jumped nearly 4 percent to a record after its strong results and forecast, saying the tax overhaul would benefit earnings further.

The technology sector, expected to benefit the least from lower taxes, declined 0.52 percent. Among the few gainers was Micron, up 2.27 percent after the chipmaker’s strong results and forecast.

Consumer staples index fell 0.64 percent, weighed down by a 2.2 percent slide in Philip Morris.

Reuters reported former Philip Morris employees detailed irregularities in the clinical experiments for the company’s e-cigarette, due to be voted on by the U.S. FDA next year.

Advancing issues outnumbered decliners on the NYSE by 1,480 to 1,271. On the Nasdaq, 1,385 issues rose and 1,362 fell. (Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty and Savio D‘Souza)

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