US pre-open: Stocks seen lower amid worries over tax cut delay
US futures pointed to a weaker open on Wall Street on Friday amid concerns that a possible delay in corporate tax cuts until 2019 could put an end to the recent rally in equity markets.
At 1300 GMT, Dow Jones Industrial Average futures were down 0.2%, while S&P 500 and Nasdaq futures were 0.4% and 0.3% lower, respectively. Volumes may be lighter than usual as traders may be off for Veterans Day.
Investors are likely to be focusing on the fact that the Senate Finance Committee unveiled its version of the draft tax bill on Thursday, which includes a proposal to defer a cut in corporate tax to 20% until 2019, rather than next year as suggested by the House.
IG analyst Chris Beauchamp said: “The twists and turns in Congress regarding the administration’s tax plan are hard to follow, but the overall impression is that we won’t get much progress on reform before the Thanksgiving recess begins. For a market that had invested great hope in the plan, this is a heavy blow. The rally had been looking increasingly precarious, as breadth deteriorated over the past week, with yesterday’s drop an inevitable consequence of underlying weakness.”
In corporate news, department store chain JC Penney rallied in pre-market trade after it posted a bigger-than-expected jump in quarterly same-store sales.
Dynavax shares rocketed after the company’s hepatitis B vaccine won approval from the US Food and Drug Administration approval on its third attempt.
Altice USA shares surged on news that chief executive, Dexter Goei, will assume the CEO role at parent Altice NV amid a major management reshuffle.
Graphic chip maker Nvidia was on the front foot after its quarterly numbers late on Thursday beat analysts’ expectations, while rental car group Hertz Global rose in pre-market trade after better-than-expected earnings.
On the data front, the Michigan consumer sentiment index is at 1500 GMT.