Wall Street Set To Rise On Tax-Cut Optimism

Rama Venkat Raman and Arun Koyyur | Reuters

Wall Street Set To Rise On Tax-Cut Optimism
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 28, 2017. REUTERS/Brendan McDermid

(Reuters) – Technology stocks edged higher on Tuesday and signaled a pause to two days of selloff, while a rally in bank and other stocks powered by tax-cut optimism stalled, capping gains on the S&P 500 and the Dow.

Micron Technology (MU.O), Amazon (AMZN.O) and Microsoft (MSFT.O) were among the biggest tech gainers, while Bank of America (BAC.N) and retail stocks Macy’s (M.N) and Nordstrom (JWN.N) were all lower.

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 9:41 a.m. ET (1441 GMT), the Dow Jones Industrial Average .DJI was up 1.32 points, or 0.01 percent, at 24,291.37, the S&P 500 .SPX was up 0.61 points, or 0.02 percent, at 2,640.05 and the Nasdaq Composite .IXIC was up 29.50 points, or 0.44 percent, at 6,804.87.

Autozone (AZO.N) shares climbed 6.37 percent after the auto parts retailer’s quarterly revenue and profit topped estimates.

McDonald’s (MCD.N) rose 1.67 percent, providing the biggest boost to the Dow, after brokerage Jefferies slapped a “buy” rating.

Toll Brothers (TOL.N) shares slid about 10 percent after the company’s quarterly profit and revenue missed estimates and it forecast a decrease in full-year 2018 adjusted gross margin.

Declining issues outnumbered advancers on the NYSE by 1,441 to 1,076. On the Nasdaq, 1,315 issues rose and 1,072 fell.