Wall Street set to open higher fueled by tax-cut optimism

FAN Editor
FILE PHOTO: The New York Stock Exchange (NYSE) is pictured in New York City
FILE PHOTO: The New York Stock Exchange (NYSE) is pictured in New York City, New York, U.S., August 2, 2017. REUTERS/Carlo Allegri/File Photo

October 20, 2017

By Sruthi Shankar

(Reuters) – Wall Street was poised to open higher on Friday on growth optimism as the Trump administration inched a step closer to implementing its tax-cut plan.

The Republican-controlled Senate approved by a 51-to-49 vote a budget blueprint for the 2018 fiscal year in a pursuit to legislate the tax-cut package without Democratic support.

Hopes of tax cuts have helped the market rally, as companies expect the move to lift economic growth and inflation.

“The good thing is we’re seeing incremental positives as we move toward tax cuts,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

Third-quarter earnings season gets under way, with 73 percent of the 74 S&P 500 companies that have reported so far beating expectations.

“We’ve got more good news than bad on the earnings front, economic data that’s been fairly consistent, yield that’s stuck around 2.3 (percent) and oil prices around $52. That’s all consistent with the market that’s doing the slow grind higher,” Hogan said.

The Dow and the S&P 500 turned higher to close at record levels on Thursday after a Politico report said Federal Reserve Governor Jerome Powell is the leading candidate for Fed chair.

Investors are keen to know who Trump will pick as the nominee. Trump has concluded interviews with the five candidates he is considering for the post and could announce a decision as early as next week, Reuters reported.

At 8:31 a.m. ET, Dow e-minis <1YMc1> were up 79 points, or 0.34 percent, with 32,801 contracts changing hands.

S&P 500 e-minis <ESc1> were up 5.5 points, or 0.21 percent, with 206,696 contracts traded.

Nasdaq 100 e-minis <NQc1> were up 12.25 points, or 0.2 percent, on volume of 40,138 contracts.

General Electric <GE.N> shares tanked about 7 percent in premarket trading after the industrial conglomerate reported a profit miss and slashed its earnings forecast.

Procter & Gamble <PG.N> dipped 1.74 percent after the company’s sales narrowly missed estimates.

Skechers USA <SKX.N>, jumped about 28 percent after reporting better-than-expected profit, largely helped by international sales growth.

Celgene <CELG.O> dipped 6.81 percent after the company said it would abandon testing a drug to treat Crohn’s disease.

PayPal <PYPL.O> rose nearly 6 percent following the payment company’s upbeat earnings and forecast.

A National Association of Realtors report due at 10:00 a.m. ET is likely to show a fall in September existing home sales.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)

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