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Stocks close higher, but GE and tax worries cap gains

CNBC logo CNBC 3 days ago Alexandra Gibbs and Fred Imbert

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Stocks ended higher Monday even as a decline in General Electric shares, coupled with worries about tax reform, capped gains in the major indexes.

The S&P 500 managed to rise 0.1 percent, with Mattel shares surging more than 20 percent. GE shares, meanwhile, fell more than 7 percent after the company issued weaker-than-expected guidance for 2018.

The Nasdaq also added 0.1 percent, with Facebook, Amazon, Netflix and Alphabet advancing, while Apple and biotech stocks declined.

The Dow rose 17 points, with Boeing contributing the most to the slight gains, while GE was the biggest decliner on the index. Dubai airline Emirates unveiled a provisional order for 40 of Boeing's 787 Dreamliners. The deal is worth $15.1 billion.

Market sentiment has been on edge as of late as investors wonder whether the government will get tax reform done at all this year.

There are also worries that, even if tax reform gets done, a corporate tax cut could be delayed until 2019. These concerns came about after the Senate unveiled its own tax reform bill. In contrast, a House bill would slash the corporate rate immediately. The House wants to vote on its bill this week.

"As the tax debate intensifies, investors are becoming more skeptical" that lower corporate taxes will arrive this year, said Peter Cardillo, chief market economist at First Standard Financial. "I think the market is caught in a reality check right now."

Equities had rallied to record highs amid renewed hope that the GOP-led Congress, along with the Trump administration, would be able to move forward with tax reform this year.

President Donald Trump said in a tweet Monday that he was proud of the House and Senate " for working so hard on cutting taxes {& reform.} We're getting close!"

Elsewhere, there are no major economic data set for release Monday, but investors are looking ahead to key inflation data due later in the week.

Earnings rolled again Monday, with Tyson Foods and JD.com reporting quarterly results before the open. Switch is set to report after the bell.

Overseas, European markets fell broadly. The Stoxx 600 index, which is made up of a broad swath of European equities, fell 1 percent, while markets in Asia finished mostly in the red.


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