Wall Street ends day lower as tax reform uncertainty weighs

Major equity indexes in the U.S. started the day on a positive note on the back of robust retails sales data but struggled to push higher as uncertainties surrounding the tax bill triggered a broad-based sell-off.

On Thursday, the Commerce Department reported that retail sales, boosted by the Black Friday and holiday season shopping, increased by 0.8% on a monthly basis in November despite a notable reduction in motor vehicles. Moreover, October's reading was revised up to 0.5% from 0.2%. Other data from the U.S. revealed that initial jobless claims dropped to 225K from 236K for the week ending December 8, its lowest level since 1973. 

Although Congressional Republicans were able to reach an agreement on final tax legislation yesterday, Florida's Marco Rubio and Utah's Mike Lee voiced their opposition to the bill in its current state, demanding changes to the child tax credit refundability. “The fear they can’t get corporate tax cuts across the finish line might be causing the market to turn down, despite the strong retail sales and other good economic data,” Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, told Reuters.

After touching its best level of the year on Tuesday amid rate hike expectations, the S&P 500 Financials Sector (SPSY) pushed lower for the second straight day on Thursday and closed with a 0.7% daily loss. The S&P 500 Health Care Sector (SPXHC) lost more than 1% while the S&P 500 Energy Sector (SPNY). 

Meanwhile, Walt Disney reached a deal to buy Twenty-First Century Fox’s assets for $52.4 billion in stock, lifting both companies' shares up 5.8% and 3.5% respectively while boosting other media stocks. In fact, the S&P 500 Media (Industry Group) finished the day 1.62% higher.

The Dow Jones Industrial Average dropped 68.47 points, or 0.28%, to 24,516.96, the S&P 500 lost 10.36 points, or 0.39%, to 2,652.49 and the Nasdaq Composite fell 18.24 points, or 0.27%, to 6,857.56.