NEW YORK: Wall Street looked set to open flat on Wednesday, a day after the Dow closed at a record high for the fourth straight day, as investors keep a close tab on the debate among lawmakers on the tax bill.
Shares of Snapchat operator Snap fell 11.2 percent in premarket trading after China’s Tencent took a 12 percent stake. The stock had fallen nearly 20 percent earlier, a day after Snap reported much-slower-than expected advertising revenue and user growth.
Investors are nervous about the potential outcome of a Republican plan to cut corporate taxes, unveiled last week. As well as slashing the corporate rate to 20 percent from 35 percent, the bill would eliminate many tax breaks and is expected to face opposition from interest groups.
Senate Republican leaders are considering a one-year delay in the implementation of a major corporate tax cut to comply with Senate rules, The Washington Post reported on Tuesday, citing unidentified sources.
“I do expect the tax bill to be watered down,” said Scott Brown, chief economist at Raymond James.
“My concern is that the market has fully factored in that a tax bill is going to come to pass and this is still a very difficult road to get this done and there’s not a whole lot of time.”
Republicans are yet to score a major legislative win since Trump took office in January, even though the party controls both chambers of Congress as well as the White House.
The S&P has risen about 21 percent since the election of President Donald Trump, partly on the back of his promises to cut taxes and other business-friendly measures.
The index ended marginally lower on Tuesday after a disappointing profit forecast from Priceline and a drop in financials.
Dow e-minis were down 3 points, or 0.01 percent, with 24,060 contracts changing hands at 8:23 a.m. ET (1223 GMT).
S&P 500 e-minis were down 1.25 points, or 0.05 percent, with 156,592 contracts traded.
Nasdaq 100 e-minis were up 2.25 points, or 0.04 percent, on volume of 27,703 contracts.
The market is also keeping an eye on President Donald Trump’s Asia trip, during which he used some of his toughest language yet to warn North Korea against the development of its nuclear weapons.
With third-quarter earning season winding down, earnings for the quarter are expected to have climbed 8 percent, compared with expectations of a 5.9 percent rise at the start of October, according to Thomson Reuters I/B/E/S.
Take-Two Interactive Software rose 12.2 percent after the videogame maker gave a stronger-than-expected revenue forecast for the holiday quarter.
Regeneron Pharmaceuticals was up 3.6 percent, after the drugmaker reported a better-than-expected quarterly profit.
Source: Brecorder.com
