US open: Tech less in favour as US tax cuts progress

Wall Street is trading on a mixed note at the start of the week as investors welcome news that Senate Republicans have passed their proposed tax reform bill but rotate out of technology stocks, although political concerns were still on some traders' minds.

At 1458 GMT, the Dow Jones Industrial Average was up by 1.14% or 268.46 points to 24,499.11, while the S%P 500 was climbing 0.62% or 16.42 points to trade at 2,659.05.

The tech-heavy Nasdaq Composite on the other hand was off by -0.18% or 11.55 points to 6,839.58.

From a sector standpoint, the best performance was to be seen among the following industrial groups: Airlines (3.58%), Broadcasting 3.17% and Iron & Steel (3.15%).

In parallel, the yield on the benchmark 10-year US Treasury was three basis points higher to 2.39%.

At the weekend, the US Senate voted 51 to 49 to pass a bill that will implement a slew of changes to the US tax code which will include a big cut in corporation tax.

Analysts at Rabobank and Berenberg believed the lion's share of the boost to US GDP growth would arrive in 2018 and 2019, with the latter now predicting four interest rate hikes from the Federal Reserve in 2018 on the back of the proposed legislative changes.

According to Berenberg's chief US economist, Mickey D.Levy, the proposed tax cuts would stoke an acceleration in the rate of business fixed investment to an annualised pace of roughly 6.6% over 2018-2019, from the average 3% clip it had sustained over the past five years.

On the political front, as things would have it, late on 1 December ABC was forced to publish a correction to an earlier report in which it claimed that ex-US national security adviser Michael Flynn might testify that he had been instructed to contact Russian officials during the past US elections.

Instead, he was reportedly asked to do so after the elections, during the so-called 'transition' period between administrations.

Be that as it may, the rally that ensued in US Treasuries on 1 December was only partly unwound following the rectification from ABC.

"The fact that only half of the rally was reversed on Friday is likely a reflection of the fact that, despite ABC having corrected its earlier inflammatory report, Flynn's admission of guilt raises the prospect of the investigation moving toward President Trump's inner circle," Rabobank said.

In corporate news, shares in General Cable surged after it agreed to be bought by Italian cable maker Prysmian Group in a deal that values the company at around $3bn including debt and other liabilities.

Elsewhere, drugstore chain CVS Health inked a deal to buy health insurer Aetna in a deal worth around $69bn.

Hartford Financial was in focus after agreeing to sell its run-off-life and annuity businesses, Talcott Resolution, to a group of investors in a deal valued at $2.05bn.

Dow Jones - Risers

JP Morgan Chase & Co. (JPM) $107.96 3.03%
Verizon Communications Inc. (VZ) $52.11 2.40%
Boeing Co. (BA) $277.61 2.30%
Walt Disney Co. (DIS) $107.64 2.27%
Home Depot Inc. (HD) $184.06 2.02%
Caterpillar Inc. (CAT) $143.88 1.67%
Merck & Co. Inc. (MRK) $56.11 1.52%
Dowdupont Inc. (DWDP) $72.00 1.39%
Goldman Sachs Group Inc. (GS) $252.11 1.27%
Intel Corp. (INTC) $45.21 1.18%

Dow Jones - Fallers

Visa Inc. (V) $110.00 -2.30%
United Technologies Corp. (UTX) $121.07 -0.31%
Microsoft Corp. (MSFT) $84.04 -0.26%
McDonald's Corp. (MCD) $172.67 -0.12%
Coca-Cola Co. (KO) $45.94 -0.07%
Johnson & Johnson (JNJ) $139.92 -0.04%
3M Co. (MMM) $243.26 0.05%
Nike Inc. (NKE) $60.47 0.08%
Unitedhealth Group Inc. (UNH) $228.50 0.14%
Procter & Gamble Co. (PG) $90.50 0.15%

S&P 500 - Risers

Transocean Ltd. (RIG) $10.73 5.82%
Bed Bath & Beyond Inc. (BBBY) $23.60 5.26%
Murphy Oil Corp. (MUR) $29.23 4.58%
Frontier Communications Co. (FTR) $8.94 4.56%
United States Steel Corp. (X) $30.22 4.50%
Macy's Inc. (M) $25.27 4.46%
Schlumberger Ltd. (SLB) $65.46 4.15%
Kroger Co. (KR) $26.71 4.05%
Express Scripts Holding Co (ESRX) $67.00 4.02%
Newfield Exploration Co (NFX) $32.15 3.96%

S&P 500 - Fallers

First Solar Inc. (FSLR) $57.60 -4.48%
Signet Jewelers Ltd (SIG) $50.49 -3.44%
CVS Health Corp (CVS) $72.79 -3.10%
Thermo Fisher Scientific Inc. (TMO) $187.22 -2.87%
Tenet Healthcare Corp. (THC) $13.74 -2.55%
Adobe Systems Inc. (ADBE) $175.71 -2.12%
Roper Technologies Inc (ROP) $261.75 -2.04%
Electronic Arts Inc. (EA) $103.90 -2.00%
Visa Inc. (V) $110.39 -1.96%
Vulcan Materials Co. (VMC) $123.21 -1.94%

Nasdaq 100 - Risers

Express Scripts Holding Co (ESRX) $67.00 4.02%
Fastenal Co. (FAST) $54.23 3.93%
Discovery Communications Inc. Class A (DISCA) $20.16 3.60%
Discovery Communications Inc. Class C (DISCK) $19.02 3.37%
Hologic Inc. (HOLX) $42.21 3.33%
Comcast Corp. (CMCSA) $39.69 3.28%
Viacom Inc. Class B (VIAB) $29.33 3.27%
Dollar Tree Inc (DLTR) $106.15 3.05%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $218.93 2.99%
CSX Corp. (CSX) $57.72 2.81%

Nasdaq 100 - Fallers

Adobe Systems Inc. (ADBE) $175.71 -2.12%
Electronic Arts Inc. (EA) $103.90 -2.00%
Symantec Corp. (SYMC) $28.64 -1.61%
Activision Blizzard Inc. (ATVI) $61.33 -1.01%
Paypal Holdings Inc (PYPL) $74.61 -0.92%
Applied Materials Inc. (AMAT) $51.53 -0.73%
QUALCOMM Inc. (QCOM) $65.03 -0.70%
Analog Devices Inc. (ADI) $84.84 -0.66%
Walgreens Boots Alliance, Inc. (WBA) $71.00 -0.63%
Gilead Sciences Inc. (GILD) $74.87 -0.63%