With traders keeping a close eye on developments in Washington, stocks are showing a lack of direction in morning trading on Friday. The major averages have spent the morning bouncing back and forth across the unchanged line.
Currently, the major averages are roughly flat. While the Dow is up 1.18 points or less than a tenth of a percent at 24,273.53, the Nasdaq is down 14.22 points or 0.2 percent at 6,859.75 and the S&P 500 is down 0.28 points or less than a tenth of a percent at 2,647.30.
The choppy trading on Wall Street comes as traders seem reluctant to make any significant moves amid uncertainty about the prospects for the Senate Republican tax reform bill.
Optimism about passage of the bill contributed to the strength seen on Thursday, although GOP leaders were forced to delay a final vote after the legislation hit a snag.
Reports suggest the Senate parliamentarian ruled against the so-called “trigger” proposed by Senator Bob Corker, R-Tenn., which would raise taxes if the economic growth generated by the tax cuts does not offset the cost.
The latest reports suggest that Republicans have rounded up enough votes to pass a revised bill, with a series of roll call votes scheduled for 11 am ET.
The outcome of the final vote on the tax reform bill is likely to have a major impact on the markets, as optimism about a corporate tax rate cut has been a key driver behind the run by stocks to new record highs.
On the U.S. economic front, the Institute for Supply Management released a report showing a modest slowdown in the pace of growth in manufacturing activity in the month of November.
The ISM said its purchasing managers index dipped to 58.2 in November from 58.7 in October, although a positive reading still indicates growth in manufacturing activity. Economists had expected the index to edge down to 58.4.
Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, said faster growth in new orders and production was offset by supplier delivery improvement and declines in raw material inventory.
A separate report from the Commerce Department showed a much bigger than expected increase in construction spending in the month of October.
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Energy stocks are seeing considerable strength, however, benefiting from a sharp increase by the price of crude oil. Crude for January delivery is jumping $1.27 to $58.67 a…