US stocks drop as investors await tax-cut vote; dollar rises

Bloomberg

US equity markets fell in lighter-than-usual trading as investors waited for lawmakers to vote on tax cuts in the world’s largest economy. Treasuries declined while the dollar rose.
The S&P 500 Index dropped after prospects for passing the tax plan had sparked a two-day rally of almost 1.5 percent that took the benchmark within a whisker of 2,700 for the first time. The US House of Representatives was scheduled to vote on Tuesday on the bill. The action then turns to the Senate, where Republican leaders intend to bring the measure up as soon as they get it.
“The market really has been trading in lock-step with the progress that’s being made,” Art Hogan, chief market strategist at B. Riley FBR Inc., said. “Any pause we’re taking today is sort of taking a deep breath to see if we get across the goal line.”
The Stoxx Europe 600 declined as gains for airline shares and real estate companies failed to offset a drop in resource stocks. The region’s core bonds declined, with German yields seeing their biggest gains in more than five months after a ECB Governing Council member said discussions were moving to the future use of interest rates rather than asset purchases to regulate the economy.
Sterling declined as Brexit efforts rumbled on. The Mexican peso dropped to its weakest in a month.
Oil traded above $57 a barrel before US data forecast to show crude stockpiles in the world’s biggest consumer fell for a fifth week. Gold fell and copper rose.
It was a mixed picture for equities in Asia, with benchmarks in Japan and South Korea falling earlier as stocks in Sydney, Hong Kong and China climbed.
The US and UK publish updated estimates of third-quarter GDP. The Bank of Japan will meet on Thursday to set monetary policy. Catalonia’s secessionists are at risk of becoming a minority in the Spanish region’s parliament as the main pro-unity party is set to add seats in Thursday’s election.
The S&P 500 Index declined 0.1 percent as of 11:59 am New York time The Stoxx Europe 600 Index dipped 0.4 percent. The UK’s FTSE 100 Index gained less than 0.1 percent. Germany’s DAX Index sank 0.7 percent. The MSCI Emerging Market Index increased 0.2 percent to the highest in three weeks.
The Bloomberg Dollar Spot Index gained 0.1 percent. The euro climbed 0.3 percent to $1.1821. The British pound fell 0.2 percent to $1.3352. The Japanese yen declined 0.4 percent to 112.99 per dollar. The Mexican peso fell 0.7 percent to 19.2184 per dollar.
The yield on 10-year Treasuries advanced six basis points to 2.45 percent, the highest in almost eight weeks. Germany’s 10-year yield climbed seven basis points to 0.38 percent, the highest in more than two weeks. Britain’s 10-year yield advanced six basis points to 1.205 percent.
West Texas Intermediate
crude advanced 0.5 percent to $57.42 a barrel. Gold fell 0.1 percent to $1,260.63 an ounce. Copper rose 0.6 percent to $6,945 a
metric ton, the highest in more than three weeks.