Futures rise as tax overhaul bill nears passage

Dec 20 (Reuters) – U.S. stock futures pointed to strong gains for Wall Street on Wednesday after the Senate approved a sweeping $1.5-trillion tax bill, taking President Donald Trump closer to his first legislative victory.

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The bill was approved on a 51-48 vote, but the Senate had to send it back to the House for a re-vote due to a last-minute procedural snag. The move, however, is not expected to change the outcome.

The proposed changes include cutting corporate tax rate to 21 percent from 35 percent beginning Jan. 1, and are expected to be a major driver for earnings in 2018.

The much-anticipated bill has powered a record-setting rally in stocks as many strategists estimate the cut in corporate tax could deliver an extra boost to earnings of between about 7 percent to more than 10 percent next year.

The House is expected to give its final approval on Wednesday and send the bill to Trump to sign into law.

At 6:58 a.m. ET (1158 GMT), S&P 500 e-minis were up 7.5 points, or 0.28 percent, with 147 contracts changing hands.

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Nasdaq 100 e-minis were up 22.25 points, or 0.34 percent, in volume of 27 contracts.

Dow e-minis were up 76 points, or 0.31 percent, with 5 contracts changing hands.

FedEx Corp, which reported results on Tuesday, gave an upbeat earnings forecast for 2018 as it hopes to benefit from the tax overhaul. Its shares were up 2.6 percent premarket.

Micron Technology jumped 7 percent after the chipmaker provided better-than-expected current-quarter profit forecast, allaying concerns that a boom in chip demand had peaked.

Biogen rose 1.42 percent after Credit Suisse upgraded the stock to “outperform,” saying Wall Street has underestimated sales potential for key drug Spinraza outside the United States in 2018.

Red Hat fell 2.23 percent after rising about 85 percent so far this year, after the Linux distributor reported results.

The National Association of Realtors is expected to report existing home sales rose 0.9 percent in November after rising 2 percent in the previous month. The report is due at 10:00 a.m. ET.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty)

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