Markets hit records before Trump speech

Wall Street seesawed, with the Dow and S&P 500 touching record highs earlier in the session. Photo / AP

Wall Street seesawed, with the Dow and S&P 500 touching record highs earlier in the session, as investors geared up for US President Donald Trump's address to Congress on Tuesday, which might offer more details on tax promises that have lifted equities.

Trump is also expected to elaborate on plans for health care reform and infrastructure spending.

"We're going to start spending on infrastructure big," Trump told a group of governors at the White House on Monday.

His comments lifted the industry's stocks.

"If we have a market that is willing to accept a roadmap that says we are going to repeal and replace Affordable Care Act and then have some form of tax reform by the August recess, I think the market will continue to be supportive," Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York, told Reuters.

In 1.06pm trading in New York the Dow Jones Industrial Average slipped 0.05 per cent, while the Nasdaq Composite Index inched 0.01 per cent lower. In 12.51pm trading, the Standard & Poor's 500 Index drifted down 0.05 per cent.

"We are concerned that the markets could be heading for a harsh reality check if the Trump administration fails to meet high expectations as reflected in strong equity gains, including risky assets," Piotr Matys, currency strategist at Rabobank in London, wrote in a note to clients, Bloomberg reported.

"It seems to us that the markets are too optimistic, looking from the glass half full perspective and not pricing enough of the negatives," Matys noted.

Shares of Time Warner rose, trading 1.1 per cent higher as of 1.12pm in New York. The new chairman of the Federal Communications Commission said Monday he didn't expect the agency to have a role in reviewing AT&T's US$85 billion takeover of Time Warner, the Wall Street Journal reported.

Shares of Tesla dropped, last trading 4.7 per cent lower, after Goldman Sachs cut its rating on the electric carmaker's stock to "sell" from "neutral" and downgraded its price target.

Concerns that Tesla's Model 3 production this year might be delayed, as well as expectations the company will sell stock to raise US$1.7 billion, prompted the downgrade by Goldman Sachs analyst David Tamberrino, according to Reuters.

Meanwhile, a National Association of Realtors report showed its pending home sales index fell 2.8 per cent to 106.4 in January, from an upwardly revised 109.5 in December 2016. It's the lowest level in one year.

"The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay," Lawrence Yun, NAR chief economist, said in a statement. "Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago. Most notably in the West, it's not uncommon to see a home come off the market within a month."

In Europe, the Stoxx 600 Index ended the session with a decline of 0.1 per cent from the previous close. However, the UK's FTSE 100 Index added 0.1 per cent, while Germany's DAX Index rose 0.2 per cent.

France's CAC 40 Index ended the day unchanged from the previous close.