Stocks fell earlier this morning after details emerged on House Republicans' plans for tax reform. However, by midday, the S&P 500 and Nasdaq were lower, while the Dow recovered to trade slightly higher.
The GOP proposes permanently cutting the corporate tax rate to 20% from 35% and slashes the number of tax brackets to three, while keeping a top rate of 39.6% for high earners.
Republicans also cut the threshold for taxable income on mortgages in half, sending homebuilder stocks into a tailspin. D.R. Horton Inc. (DHI) , Toll Brothers Inc. (TOL) , and Lennar Corp. (LEN) were sharply lower, while Home Depot Inc. (HD) weighed on the Dow.
Time Warner Inc. (TWX) plummeted on reports the DoJ might sue to block a purchase by AT&T Inc. (T) . A lawsuit could be filed on antitrust grounds. The deal had been expected to close by the end of the year.
Despite the president's promise of no stimulus until after Nov. 3, there are no signs yet that this is the sort of correlated selling that leads to a deep correction.
Breaking down an approach to the long side of this biotech stock.
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