Global stocks retreat after Trump tax plan; Canada dollar, Mexico peso weaken

Wed Apr 26, 2017 4:21pm EDT
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By Chuck Mikolajczak

NEW YORK (Reuters) - Equities retreated from highs on Wednesday after a U.S. tax plan disappointed, while the Canadian dollar and Mexican peso weakened against the greenback on the possibility of a U.S. withdrawal from the North American Free Trade Agreement.

Wall Street gave up gains after U.S. President Donald Trump proposed slashing tax rates for businesses and on overseas corporate profits returned to the country in a long-awaited plan greeted as an opening maneuver by his fellow Republicans in Congress.

The plan would cut the income tax rate paid by public corporations to 15 percent from 35 and reduce the top tax rate assessed on pass-through businesses, including small partnerships and sole proprietorships, to 15 percent from 39.6.

"The key question really is what is doable from a budgetary and political perspective in Congress and this is going to be a bit of an uphill fight to get this plan enacted into law," said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas in New York.

"At the end of the day, earnings for any particular company are going to be the biggest driver."

Thermo Fisher Electron (TMO.N: Quote), up 5.8 percent, was the top boost to the benchmark S&P index while Dow component United Technologies (UTX.N: Quote) gained 1.1 percent after results.

The U.S. dollar retreated from highs against major rivals in the wake of the tax plan but strengthened against both the Mexican peso and Canadian dollar after a senior Trump administration official said a draft executive order to withdraw the United States from the North American Free Trade Agreement is under consideration.

The Dow Jones Industrial Average .DJI fell 21.03 points, or 0.1 percent, to end at 20,975.09, the S&P 500 .SPX lost 1.16 points, or 0.05 percent, to 2,387.45 and the Nasdaq Composite .IXIC dropped 0.27 point to 6,025.23.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., April 24, 2017. REUTERS/Brendan McDermid