After falling sharply in late morning trading, stocks climbed well off their worst levels of the day but still ended the day modestly lower. The Dow and the S&P 500 pulled back off the record closing highs set in the previous session.
The major averages all finished the session below the unchanged line. The Dow slipped 40.76 points or 0.2 percent to 24,231.59, the Nasdaq fell 26.39 points or 0.4 percent to 6,847.59 and the S&P 500 dipped 5.36 points or 0.2 percent to 2,642.22.
For the week, the major averages turned in a mixed performance. While the Nasdaq slid by 0.6 percent, the Dow surged up by 2.9 percent and the S&P 500 jumped by 1.5 percent.
The late-morning sell-off on Wall Street came on news that former National Security Adviser Michael Flynn has agreed to cooperate with prosecutors in the investigation of Russian meddling in last year’s election.
Flynn pleaded guilty to lying to the FBI about conversations with the Russian ambassador, signaling that he had reached an agreement with Special Counsel Robert Mueller’s team.
A report from ABC News said Flynn is prepared to testify that then-candidate Donald Trump directed him to make contact with the Russians.
However, stocks regained ground as Senate Majority Leader Mitch McConnell, R-Ken., declared that Republican leaders have been successful in winning over enough reluctant lawmakers to pass their tax reform bill.
“We have the votes,” McConnell told reporters as he walked to the Senate floor following a Republican conference meeting.
At least fifty Republican Senators have agreed to support the bill, allowing the GOP to pass the legislation with a tie-breaking vote from Vice President Mike Pence.
The news out of Washington overshadowed a report from the Institute for Supply Management 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.
Airline stocks showed a significant move to the…