Wall Street set to rise after GDP data, tax bill passage

File picture shows traders working on the floor of the New York Stock Exchange in New York. ― Reuters pic
File picture shows traders working on the floor of the New York Stock Exchange in New York. ― Reuters pic

NEW YORK, Dec 21 — Wall Street was set to open higher today after data showed US economy grew at its fastest pace in more than two years in the third quarter, and investors eyed gains from sweeping tax cuts passed by Congress this week.

GDP expanded at a 3.2 per cent annual rate last quarter, the Commerce Department said today, and was poised for what could be a modest lift next year from sweeping tax cuts passed by Congress.

The three main stock indexes dipped yesterday after both houses of Congress approved the bill, which includes cutting corporate tax rate to 21 per cent from 35 per cent.

“Market is looking at other factors besides the tax perspectives and is going to be driven by a slew of macro news,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

“We’re headed for a mixed to positive session, with macro indicators continuing to cheer on investors.”

In other data, jobless claims increased more than expected last week, but the underlying trend remained consistent with a tightening labour market.

The S&P 500 has risen by about 20 per cent this year, its best performance since 2013, partly on hopes of tax cuts.

A bunch of companies including AT&T, Wells Fargo and Boeing promised higher pay for workers or more investment in training. Some others have forecast a rise in earnings due to tax cuts.

At 8.36am ET (1336 GMT), S&P 500 e-minis were up 5.25 points, or 0.2 per cent, with 185 contracts changing hands.

Nasdaq 100 e-minis were up 5 points, or 0.08 per cent, in volume of 33 contracts.

Dow e-minis were up 22 points, or 0.09 per cent, with 4 contracts changing hands.

Accenture jumped 3.5 per cent in premarket trading after the consulting and outsourcing services provider reported strong quarterly profit driven by digital and cloud services business.

Bed Bath and Beyond fell about 5 per cent after the company said comparable sales fell 0.3 per cent in the third quarter.

Conagra rose 2.25 per cent after the maker of Chef Boyardee pasta reported a better-than-expected profit and revenue as consumers stocked up on food items because of hurricanes. — Reuters

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