US stocks languish as investors await update on US tax legislation
• US tax bill uncertainty prompts some profit-taking.
• US PPI print surpasses expectations.
Major US equity indices witnessed yet another weaker opening on Tuesday amid persistent uncertainty over the Republican tax-cut legislation.
Mounting concerns about a possible delay in the long-awaited corporate tax cuts have been one of the key drags on equities over the past one week and hence, investors would continue to pay close attention to any fresh news/development on the subject.
Meanwhile, overstretched valuations and increasing prospects for tighter monetary policies could act as a catalyst that could potentially trigger a near-term market correction. Hence, fears of a more pronounced drop further weighed on investors’ sentiment and now seem to have prompted some profit-taking.
On the economic data front, a reading for producer prices (PPI) topped expectations and rose 0.4% in October, with yearly rate up 2.8%, the highest since February 2012. Excluding food and energy prices, core PPI also bettered expectations and rose 2.4% y-o-y in October but did little to influence already weaker market sentiment.
During the opening hour of trade, the Dow Jones Industrial Average was down around 60-points to 23,381, while the broader S&P 500 Index slipped nearly 9-points to 2,576. Meanwhile, tech-heavy Nasdaq Composite Index retreated over 21-points to 6,736.