November 2, 2017 / 12:55 PM / 17 days ago

Wall Street drifts with eyes on Fed chief announcement

(Reuters) - The Dow was slightly higher while the S&P and the Nasdaq pared losses in early afternoon trading on Thursday, as investors parsed the Republican tax-cut proposals and ahead of the impending announcement of the next Federal Reserve Chair

Traders work on the floor of the American Stock Exchange (AMEX) at the New York Stock Exchange (NYSE) in New York City, New York, U.S., October 27, 2017. REUTERS/Brendan McDermid

President Donald Trump is widely expected to nominate Fed Governor Jerome Powell as the next Fed head from a list that includes current Fed Chair Janet Yellen, Stanford University economist John Taylor, former Fed Governor Kevin Warsh and White House economic adviser Gary Cohn.

Powell has broadly supported Yellen’s monetary policy, and is seen as a more stock market-friendly candidate.

The announcement is expected at 3 p.m. ET (1900 GMT).

Investors were also assessing the impact of the tax-cut bill, part of Trump’s campaign promises that had sparked the rally on Wall Street.

“Even though I think there’s a lot of potentially positive developments in the tax plan, I don’t know if any actual substance that comes out of Washington can even live up to expectations already built into the market,” said Jake Dollarhide, CEO at Longbow Asset Management in Tulsa, Oklahoma.

The bill has called for slashing corporate tax rate to 20 percent from 35 percent and reducing the number of tax brackets for individuals.

Congress has not succeeded on comprehensive tax changes since 1986, when Republican Ronald Reagan was in the White House and Democrats controlled the House.

At 12:55 p.m. ET (1655 GMT), the Dow Jones Industrial Average was up 38.22 points, or 0.16 percent, at 23,473.23, the S&P 500 was down 2.21 points, or 0.09 percent, at 2,577.15. The Nasdaq Composite was down 8.80 points, or 0.13 percent, at 6,707.74.

Nine of the 11 major S&P sectors were lower, with a 0.75 percent fall in consumer discretionary stocks weighing the most. Financial and industrial stocks were the only gainers.

A bunch of poor earnings also capped market gains.

Facebook fell 2.26 percent and was the biggest drag on the S&P and the Nasdaq after the company warned of a surge in expenses next year.

Tesla dipped 7.13 percent after the electric car maker pushed back its target for volume production on its new Model 3 sedan by about three months, and reported its biggest quarterly loss ever.

Newell Brands plunged more than 25 percent after the Sharpie maker cut its full-year profit forecast and reported results below expectations.

Apple, which is set to report after market, was up marginally.

Declining issues outnumbered advancers on the NYSE by 1,440 to 1,391. On the Nasdaq, 1,560 issues rose and 1,285 fell.

Reporting by Sruthi Shankar and Tanya Agrawal; Editing by Sriraj Kalluvila

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