MARKET SNAPSHOT: U.S. Stocks On Track To Pull Back, With Tax Bill On Deck

By Sara Sjolin, MarketWatch Features Dow Jones Newswires

Apple earnings are due after the market closes

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U.S. stock futures inched lower Thursday, as traders took a cautious approach ahead of two closely watched events expected to finally land: Trump's choice of Federal Reserve Chairman and the unveiling of a House Republican tax bill.

Investors were also watching the Bank of England, which is widely predicted to raise interest rates for the first time in a decade.

Tesla and Facebook are expected to be in focus after they issued earnings reports late Wednesday. After the market closes Thursday, attention should turn to earnings from tech giant Apple and coffee-chain Starbucks.

What are stock indexes doing?

Futures for the Dow Jones Industrial Average fell 14 points, or 0.1%, to 23,358, while those for the S&P 500 index gave up 1.80 points, or 0.1%, to 2,573. Futures for the Nasdaq-100 index lost 10.25 points, or 0.2%, to 6,230.25.

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The S&P and Dow average hit intraday records during Wednesday's session (http://www.marketwatch.com/story/sp-dow-poised-for-fresh-records-at-open-as-investors-take-heart-from-earnings-2017-11-01) and ended higher, mere points shy of their all-time closing highs. The Nasdaq Composite Index slipped 0.2% on Wednesday on falls for biotech and large-cap tech stocks.

What's driving the markets?

Today should see the arrival of the House Republican tax bill, which was postponed one day to Thursday (http://www.marketwatch.com/story/house-gop-delays-tax-bill-plans-to-keep-top-individual-rate-of-396-2017-10-31) to give lawmakers more time to iron out unresolved issues. Hopes for the passage of tax reforms in Washington, including corporate tax cuts, have buoyed investing in stocks.

Media reports said the Republicans were running into difficulties reaching consensus on the tax cuts and that the expected corporate tax cuts to 20% from 35% only would be temporary.

(https://twitter.com/damianpaletta/status/925842836804833281)

Also in focus is the next Fed chair. President Donald Trump is expected to announce his pick later Thursday, with Fed Gov. Jerome Powell seen as the likely choice. The Wall Street Journal reported that the White House has already notified Powell (http://www.marketwatch.com/story/white-house-has-informed-powell-he-will-be-next-fed-chief-report-2017-11-01) that Trump intends to nominate him. That means the more hawkish John Taylor would be out of the race.

Read:What a Jerome Powell-led Fed may look like (http://www.marketwatch.com/story/imagining-life-under-a-jerome-powell-fed-2017-10-20)

Read:How the next Federal Reserve chair could affect you and your mortgage (http://www.marketwatch.com/story/how-the-next-federal-reserve-chair-could-affect-you-and-your-mortgage-2017-10-31)

Across the pond, the BOE was in the spotlight. The U.K. central bank is widely expected to raise its benchmark interest rate to 0.5% from the current record low of 0.25%, in which would be its first rate hike since July 2007.

Read: 5 things investors need to know as the Bank of England prepares for historic rate hike (http://www.marketwatch.com/story/5-things-investors-need-to-know-as-the-bank-of-england-prepares-for-historic-rate-hike-2017-10-31)

(http://www.marketwatch.com/story/5-things-investors-need-to-know-as-the-bank-of-england-prepares-for-historic-rate-hike-2017-10-31)What are analysts saying?

"It's a busy old day for markets, with the GOP tax bill proposal due later, and the likely shake-up at the Federal Reserve. Jerome Powell is tipped, and that's broadly a continuity choice, certainly not the hawkish shift that a Taylor appointment would entail. The real question is: given Donald Trump is a low interest rate guy, why not just stick with Yellen?," said Neil Wilson, senior market analyst at ETX Capital, in a note.

"Who runs the Fed is less important than what Congress does on tax. Fed officials have yet to factor in any tax reform to their projections so any cuts will push the FOMC to be more hawkish," he added.

"Should the [BOE] hold steady, market expectations would be disappointed, which would see the pound weaken. Key also will be the vote breakdown, the Bank's updated inflation projections, and any signals regarding potential future hikes. These elements will provide greater context around the Bank's decision and clues to the future direction of monetary policy," said Alexandra Russell-Oliver, FX analyst at Caxton, in a note.

What are other markets doing?

The pound fluttered around $1.3250 (http://www.marketwatch.com/story/pound-strengthens-ahead-of-historic-boe-decision-2017-11-02) ahead of the rate decision, compared with $1.3246 late Wednesday in New York.

Read:Here's how a Bank of England rate hike could 'kill' the British pound (http://www.marketwatch.com/story/heres-how-a-bank-of-england-rate-hike-could-kill-the-british-pound-2017-11-01)

The dollar fell against most other currencies, with the ICE Dollar Index down 0.1% at 94.686 and on track to break a two-day winning run.

European markets swung between small gains and losses, while Asian markets closed mixed.

Oil and gold were both down 0.1%.

Which stocks are in focus?

Shares of Tesla Inc. (TSLA) dropped 5.9% ahead of the open after the electric car maker late Wednesday reported a wider-than-expected loss (http://www.marketwatch.com/story/tesla-announces-worst-quarter-ever-model-3-delays-2017-11-01).

Facebook Inc.(FB) slipped 1% premarket even after earnings out late Wednesday beat forecasts (http://www.marketwatch.com/story/facebook-stock-up-after-earnings-and-revenue-beat-2017-11-01). Lawmakers on Wednesday warned Facebook, Alphabet Inc.'s Google(GOOGL)(GOOGL) and Twitter Inc.(TWTR) that they are considering tougher regulations on social-media sites (http://www.marketwatch.com/story/lawmakers-warn-social-media-execs-to-fix-problems-or-face-new-regulations-2017-11-01)over concerns of foreign intervention via their platforms.

Alphabet shares were down 0.2% before Thursday's open, and Twitter was down 0.7%.

Qualcomm Inc.(QCOM) lost 0.8% ahead of the open. The chip designer late Wednesday reported an 89% plunge in profits (http://www.marketwatch.com/story/qualcomm-earnings-hurt-by-fine-apple-dispute-2017-11-01), largely due to a $778 million charge related to a fine by Taiwanese regulators and Apple Inc.'s (AAPL) continued withholding of patent royalties on iPhones and iPads.

On Thursday, earnings from Alibaba Group Holding Ltd.(BABA) , DowDuPont Inc.(DWDP) , Cigna Corp.(CI) and Yum! Brands Inc.(YUM) are expected ahead of the open. And after the market closes, Apple and Starbucks Corp.(SBUX) are slated to report.

Read:Apple earnings: iPhone X supply is the question, but the answer may not matter (http://www.marketwatch.com/story/apple-earnings-iphone-x-supply-is-the-question-but-the-answer-may-not-matter-2017-10-30)

What economic data are in focus?

Weekly jobless claims are due at 8:30 a.m. Eastern Time, while productivity data and unit labor costs for the third quarter come out at the same time.

(END) Dow Jones Newswires

November 02, 2017 06:39 ET (10:39 GMT)