Financial stocks slipped on Dec. 19 even as Congress edged closer to sending a tax reform package to President Donald Trump's desk.
The House on Dec. 19 approved the conference committee's tax reform agreement in a 227-203 vote, and the Senate is expected to take up the package later in the day. But the House will need to hold another vote on the bill because several parts of the bill do not comply with Senate budget rules, lawmakers said late in the afternoon.
Analysts say the banking industry would be one of the major beneficiaries under the package, which cuts corporate tax rates from 35% to 21%. Goldman Sachs analysts, for example, said in a Dec. 18 note the change could boost earnings per share at the largest banks by 13% on average.
The SNL U.S. Bank Index dropped 0.42% to 619.84, while the SNL U.S. Thrift Index lost 0.57% to finish at 951.92.
HighMark Capital Management's Todd Lowenstein noted the slight drop follows several increases in recent weeks, as the prospects of Congress approving a tax reform bill became more likely. The markets "priced in" that success with each of those headlines, he said.
"It's a little bit of 'buy the rumor and sell the news,'" he said.
In company news, Metropolitan Bank Holding Corp. slumped 6.61% to end the day at $44.35. It disclosed in a quarterly filing that one of the customers at Metropolitan Commercial Bank is a cryptocurrency exchange, with average balances of $108 million and $137 million in two deposit accounts through the three-month period ended in October.
Among the Big Four, Citigroup Inc. was down 1.30% to $74.69, Wells Fargo & Co. lost 0.28% to close at $60.75, Bank of America Corp. declined 0.07% to $29.50 and JPMorgan Chase & Co. was off 0.41% to close at $106.52.
Meanwhile, the S&P 500 slipped 0.32% to 2,681.47, the Dow Jones Industrial Average was off 0.15% to end at 24,754.75 and the Nasdaq Composite Index lost 0.44% to end the day at 6,963.85.
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