Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 28, 2017. REUTERS/Brendan McDermid
December 5, 2017
By Rama Venkat Raman
(Reuters) – U.S. stocks were set to rise on Tuesday, driven for a second day by the shares of companies that seemed poised to benefit more from Republican-led corporate tax cuts.
Nasdaq futures rose slightly after a selloff in tech stocks on Monday pulled down the tech-heavy index and weighed on the S&P 500. The blue-chip Dow Jones index closed at a record level as banks and retailers surged.
“A lot of forgotten sectors that haven’t moved are now going into play due to the change in tax structure that will benefit them,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
The Senate approved its version of tax code overhaul in a 51-49 vote over the weekend. Talks will begin likely next week between the Senate and the House, which had approved its own version of the legislation.
Once the bills are reconciled, the resulting bill could cut corporate tax rates to 20 percent from 35 percent.
UBS strategists project that overall S&P 500 earnings would rise by 6.5 percent should the corporate tax rate fall to 25 percent and increase by 9.5 percent should the rate go to 20 percent.
At 8:31 a.m. ET (1331 GMT), Dow e-minis <1YMc1> were up 77 points, or 0.32 percent, with 29,625 contracts changing hands.
S&P 500 e-minis <ESc1> were up 5.75 points, or 0.22 percent, with 191,990 contracts traded.
Nasdaq 100 e-minis <NQc1> were up 8.5 points, or 0.14 percent, on volume of 51,008 contracts.
The U.S. Senate Banking Committee will vote on the nomination of Jerome Powell to be chairman of the Federal Reserve Bank of Governors.
Among stocks, Regal Entertainment <RGC.N> rose about 8 percent after the company agreed to be bought by Britain’s Cineworld <CINE.L> for $3.6 billion in cash.
Snap <SNAP.N> was up 5.4 percent after Barclays raised the stock’s rating to overweight and price target to $18.
Toll Brothers <TOL.N> fell 5.74 percent after the company’s quarterly profit and revenue missed estimates and it forecast a decrease in full-year 2018 adjusted gross margin.
(Reporting by Rama Venkat Raman in Bengaluru; Editing by Arun Koyyur)
