By Sara Sjolin, MarketWatch , Ryan Vlastelica
Disney, J.C. Penney rally after results; health care falls broadly
U.S. stocks edged lower on Friday, putting major indexes on track to end multiweek winning streaks, as investors continued to express anxiety about a possible delay in much-anticipated corporate tax cuts.
However, some strong corporate results limited the day's decline and kept the Nasdaq in slightly positive territory.
What are stocks doing?
The Dow Jones Industrial Average fell 33 points, or 0.1%, to 23,429. The S&P 500 was down 2 points to 2,583, a decline of 0.2%. The Nasdaq Composite Index rose 2 points to 6,752 after earlier trading in negative territory. The tech-heavy index was supported by strength in semiconductor stocks.
The major benchmarks suffered their worst session in two weeks on Thursday , with the Dow breaking a seven-day winning streak.
That decline was enough to push the indexes into negative territory for the week, and if they close lower Friday, it will end eight-week rallies for both the Dow and the S&P, as well as a six-week advance for the Nasdaq. The eight-week rallies represent the longest such streaks for both the Dow and the S&P since a stretch ending in November 2013. However, were the S&P 500 to end the week higher, the nine-week rally would represent the benchmark's longest streak since one that ended in January 2004. For the Dow, a positive weekly close would mean the longest stretch of weekly gains since one ending in May 1995.
Currently, the Dow is on track for a 0.5% decline while the S&P is off 0.2% and the Nasdaq is off 0.2%.
The Russell 2000 , which has seen the sharpest decline this week, off 1.3%, was up 0.1% on Friday.
What's driving the markets?
The Senate Finance Committee on Thursday released its draft tax bill , which differed from the House Republicans' plan. One key divergence is a proposal to defer implementing a cut in corporate tax to a 20% rate until 2019, rather than next year as put forward in the House plan.
The two versions of the tax overhaul will be further debated and negotiated before the final vote, and investors are losing faith that the bill will be passed before Thanksgiving or even Christmas.
The prospect of a major tax overhaul has been one factor propping up the U.S. stock market recently, as investors see tax cuts supporting company earnings and boosting the economy.
Traders also followed President Donald Trump's visit to Asia, where the U.S. leader delivered a strong message on trade, defending economic nationalism and saying the U.S. won't enter into multilateral deals that "tie our hands." Speaking at the Asia-Pacific Economic Cooperation summit in Vietnam, the president declared he won't "let the United States be taken advantage of anymore" when it comes to trade, seemingly delivering a rebuke to China.
Reports said the U.S. president could meet with his Russian counterpart Vladimir Putin while in Vietnam. The White House said Friday the two leaders don't have a separate, formal meeting planned due to "scheduling conflicts" but that they might bump into each other and say hello.
What are strategists saying?
"Markets have had a direct correlation to the tax plan, and have been falling on signs that progress is slowing down, and the idea that corporate taxes will be cut later than we had been expecting," said Richard Sichel, chief investment officer at Philadelphia Trust Co.
"If we see some progress, investors will start feeling better. Everyone is keyed in on this and the market is looking for it, although we just had a nice earnings season, and while this isn't a cheap market, it isn't frothy either. People can find different assets that look attractive from a long-term perspective."
"Senators remain wary that drastic changes still need to be made in order to adhere to their more stricter fiscal rules, such that the tax bill can be voted through with a simple majority. With the Congress weeklong Thanksgiving recess starting next Friday, the odds of a GOP tax plan landing on President Trump's desk this side of Christmas remain slim-to-none. A growing realization of this will see the dollar slide even lower," said Viraj Patel, foreign-exchange strategist at ING, in a note.
Which stocks are in focus?
Walt Disney Co.(>> Walt Disney Company (The)) shares rose 2.8%, even though the media giant reported an earnings and revenue miss late Thursday. Disney announced it's making a new "Star Wars" trilogy as well as developing a live-action "Star Wars" television series. The stock limited the Dow's decline.
Shares of Hertz Global Holdings Inc. (>> Hertz Global Holdings Inc) fell 1.5%, after previously rising as much as 10%, after the car rental company late Thursday reported earnings that beat Wall Street estimates . The stock has shed more than 20% this week.
Nvidia Corp.(>> NVIDIA Corporation) shares rose 6% after the graphic chip maker's quarterly results out late Thursday topped Wall Street estimates. With the day's advance, the stock has more than doubled over the course of 2017 thus far. The PHLX Semiconductor Index rose 0.7% on the day, helping to push the Nasdaq into slightly positive territory.
J.C. Penney Co.Inc. (>> J C Penney Company Inc) rallied nearly 15% after the department store retailer reported third-quarter revenue that came in above analyst forecasts . It also reported an adjusted net loss that was narrower than had been expected.
Health-care stocks were the biggest decliners of the day, with the sector down 1.2% in a broad decline. Among the biggest percentage losers, Baxter International Inc. (>> Baxter International) was down 2.3% while Medtronic Plc(>> Medtronic PLC) was off 2.4%. Humana Inc. (>> Humana Inc) shed 1.6%.
What's new in economic data?
In the latest economic data, a read on consumer sentiment fell to 97.8 in November, below the 100.7 that had been expected by analysts.
What are other markets doing?
Crude-oil prices rose 0.1% to $57.27 a barrel, on track for a 2.8% weekly gain. Such a rise would extend oil's winning run into a fifth straight week, which would be the longest winning streak since October last year.
The ICE Dollar Index was marginally lower at 94.418 and set for a 0.5% loss for the week, its first in four weeks.
Gold was down 0.2% at $1,284.70 an ounce, but on pace for its first weekly win in four weeks.
Asian stock markets closed mostly lower , while major European indexes were lower across the board.