U.S. stocks are mostly lower Thursday as investors pore over House Republicans’ tax proposals as well as a disappointing round of company results. The tax plan would reduce the amount of interest Americans can deduct on new mortgages, and homebuilders are slumping. Rubbermaid and Sharpie maker Newell Brands, generic drugmaker Teva, clothing company Hanesbrands and security software maker Symantec are all tumbling after they each slashed their annual forecasts.
KEEPING SCORE: The Standard & Poor’s 500 index fell 7 points, or 0.3 percent, to 2,572 as of 11:40 a.m. Eastern time. The Dow Jones industrial average shed 10 points to 23,424. The Nasdaq composite sank 33 points, or 0.5 percent, to 6,683. The Russell 2000 index of smaller-company stocks was little changed at 1,492.
TAX PROPOSALS: The House tax plan would cut the top corporate tax rate to 20 percent from 35 percent temporarily. It would also double the standard deduction used by most families to $12,000 for individuals and $24,000 for families and increase the child tax credit, while fewer people would pay the top individual tax rate of 39.6 percent. The deduction for state income taxes would be eliminated, and a deduction for local property taxes would be reined in.
The plan may go through significant changes before it can pass the House, and Republicans have a smaller majority in the Senate.
HOMEBUILDER SLUMP: House Republicans proposed reducing the widely-used deduction for mortgage interest for new home loans. Their proposed bill would cap the deduction for mortgage interest at $500,000, half the current limit of $1 million. That change would apply only to new loans.
Lennar fell $1.76, or 3.1 percent, to $55.20; and Toll Brothers sank $2.96, or 6.3 percent, to $43.67. D.R. Horton slid 58 cents, or 1.3 percent, to $44.15.
EARNINGS: Newell Brands said its third-quarter results were hurt by the bankruptcy of a retail partner, lost earnings from its former winter sports businesses, and higher costs. The stock tumbled $10.75, or 26.2 percent, to a three-year low of $30.25.
Generic drugmaker Teva Pharmaceuticals hit its lowest price since 2000. The company said generic drug sales dropped 8 percent, partly because Teva and its peers are being hurt by falling prices for those medications. Revenue from the company’s multiple sclerosis treatment Copaxone fell 7 percent. Teva stock dropped $1.93, or 13.8 percent, to $12.09.
Symantec slid $3.11, or 9.7 percent, to $29.05; and underwear, t-shirt and sock maker Hanesbrands lost $1.83, or 8.3 percent, to $20.18.
TECH TROUBLE: While Facebook had a better quarter than Wall Street expected, the stock dipped $4.91, or 2.7 percent, to $177.76 after some big recent gains. It’s up 55 percent this year. Security software maker FireEye lost $1.80, or 11 percent, to $14.56 after its estimates for sales and billings disappointed investors.
Tesla sank $24.16, or 7.5 percent, to $296.92 as the company is still struggling to ramp up production of its lower-cost Model 3 Sedan. Tesla lost money in the third quarter and said it will take another three months to reach a manufacturing goal for the Model 3. The company hopes the $35,000 car will help make it a mainstream car maker instead of a luxury niche company.
FED HEAD: President Donald Trump plans to announce his choice for Federal Reserve chair Thursday afternoon. Over the last week, reports have said current Fed Governor Jerome “Jay” Powell will replace current Chair Janet Yellen, whose term ends in February. Powell is generally seen as favoring lower interest rates than other top candidates, and investors generally expect him to keep raising rates at the gradual pace the Fed has maintained over the last few years.
DIAL TONE: Time Warner drooped and AT&T lost ground after The Wall Street Journal reported that the Justice Department might sue to block AT&T’s $85 billion purchase of Time Warner if the agency and the companies can’t resolve the government’s antitrust concerns. The deal would combine the second-largest U.S. telecommunications company with a media and entertainment conglomerate.
Time Warner lost $4.52, or 4.6 percent, to $93.87 and AT&T fell 21 cents to $33.34.
GET REAL: Real estate investment trusts climbed after several companies posted better-than-expected results for the latest quarter. HCP, which owns health-care properties, gained $1.16, or 4.5 percent, to $27.18. Self-storage company Extra Space rose $3.90, or 4.8 percent, to $85.50; and shopping center operator Regency Centers climbed $2.88, or 4.6 percent, to $65.
OIL: Benchmark U.S. crude dipped 1 cent to $54.29 a barrel in New York. Brent crude, the international standard, fell 12 cents to $60.37 per barrel in London.
BONDS: Bond prices rose. The yield on the 10-year Treasury note declined to 2.35 percent from 2.37 percent. The yield on the 2-year note fell to 1.61 percent from 1.62 percent.
CURRENCIES: The dollar slipped to 113.85 yen from 114.22 yen. The euro rose to $1.1669 from $1.1620.
OVERSEAS: The British FTSE 100 index rose 0.7 percent, while Germany’s DAX fell 0.3 percent. The CAC 40 in France declined 0.3 percent. Tokyo’s Nikkei 225 gained 0.5 percent, and the South Korean Kospi fell 0.4 percent while Hong Kong’s Hang Seng index shed 0.3 percent.