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US markets closed lower as investors weighed tax plan

The US markets closed lower on Friday, with the S&P 500 and the Dow logging a second straight week of losses as investors tracked the progress of the Republican tax cut plan wending its way through the legislative grind. The markets focus remains on Washington and the Senate after the House of Representatives passed a sweeping bill to overhaul the tax code on Thursday. Meanwhile, Dallas Federal Reserve Bank President Robert Kaplan repeated that he is very open-minded and actively thinking about a possible interest-rate hike at the US central bank's next policy meeting. His comments suggest a growing unease that the Fed could overheat the economy if it does not respond to falling unemployment with rate hikes. Kaplan added that unemployment, now at 4.1 percent, is expected to fall further in a deviation from the Fed's full employment goal.

On the economy front, the Commerce Department said October housing starts surged, rising 13.7% to a seasonally adjusted annual rate of 1.29 million. That's the second-highest level of the economic recovery. September estimate was revised to 1.135 million. Building permits, a less volatile series, rose 5.9% to 1.3 million. Big double-digit gains came from both the South and the Midwest, with at least some of that attributed to the recovery from the hurricanes that ravaged Texas and Florida. On a percentage basis, the Northeast was actually the biggest mover, up a whopping 42%, but that's the smallest region for activity. It's possible warm weather proved to be a boost in the Northeast region. Single-family starts rose 5.3%, and starts with five or more units leaped 37.4%.

The Dow Jones Industrial Average lost 100.12 points or 0.43 percent to 23,358.24, the Nasdaq dropped 10.5 points or 0.15 percent to 6,782.79, and the S&P 500 edged lower by 6.79 points or 0.26 percent to 2,578.85.

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