Major Averages Close Slightly Lower After Choppy Session - U.S. Commentary

(RTTNews) - After failing to sustain an initial upward move, stocks showed a lack of direction over the course of the trading session on Wednesday. The major averages spent much of the day lingering near the unchanged line.

The major averages eventually ended the session slightly lower. The Dow dipped 28.10 points or 0.1 percent to 24,726.65, the Nasdaq edged down 2.89 points or less than a tenth of a percent to 6,960.96 and the S&P 500 slipped 2.22 points or 0.1 percent to 2,679.25.

The choppy trading on Wall Street came as traders shrugged off news that Republican lawmakers managed to send a sweeping tax reform bill to President Donald Trump's desk.

The House voted 224 to 201 in favor of the bill known as the Tax Cuts and Jobs Act, with the vote coming down largely along party lines.

The bill reduces the corporate tax rate to 21 percent from 35 percent, gives tax breaks to pass-through businesses and includes provisions intended to encourage domestic business investment.

The legislation also reduces tax rate for most individuals, although the tax cuts for individuals are set to expire.

The House voted in favor of a similar bill on Tuesday but needed to re-vote due to procedural issues related to the reconciliation process.

The Senate voted 51 to 48 in favor of the $1.5 trillion tax reform bill early this morning, with the vote coming down strictly along party lines.

While GOP lawmakers argue reductions in the tax rates for businesses and individuals will boost economic growth, Democrats claim the legislation will give tax cuts to the wealthy at the expense of the middle class.

The bill also includes a repeal of Obamacare's requirement that everyone has health insurance as well as a provision allowing energy development in Alaska's Arctic National Wildlife Refuge.

In remarks at a cabinet meeting ahead of the vote, Trump described the tax reform bill as an "historic victory for the American people."

On the U.S. economic front, the National Association of Realtors released a report showing a much bigger than expected jump in existing home sales in the month of November.

NAR said existing home sales soared by 5.6 percent to an annual rate of 5.81 million in November from an upwardly revised 5.50 million in October.

Economists had expected existing home sales to rise to a rate of 5.52 million from the 5.48 million originally reported to the previous month.

With the much bigger than expected increase, existing home sales reached their highest level since hitting 6.42 million in December of 2006. Sector News

Most of the major sectors showed only modest moves on the day, contributing to the lackluster close by the broader markets.

Oil service stocks showed a substantial move to the upside, however, with the Philadelphia Oil Service Index surging up by 2.5 percent. With the jump, the index reached its best closing level in well over a month.

The strength among oil service stocks came amid an increase by the price of crude oil, as crude for February delivery rose $0.53 to $58.09 a barrel.

Significant strength was also visible among steel stocks, as reflected by the 2 percent gain posted by the NYSE Arca Steel Index. The index reached its best closing level in ten months.

Gold, natural gas, and railroad stocks also saw notable strength, while commercial real estate stocks showed a considerable move to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

Meanwhile, the major European markets all moved lower on the day. While the U.K.'s FTSE 100 Index dipped by 0.3 percent, the French CAC 40 Index fell by 0.6 percent and the German DAX Index slumped by 1.1 percent.

In the bond market, treasuries extended the downward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.4 basis points to a nine-month closing high of 2.497 percent.

Looking Ahead

Economic data may attract attention on Thursday, with traders likely to keep an eye on reports on weekly jobless claims, Philadelphia-area manufacturing activity, and leading economic indicators.