Biogen falls after update on Alzheimer's drug
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U.S. stock index-futures pointed to a modestly higher open on Thursday, suggesting indexes would trade near record levels, although market action could be quiet as traders look for fresh catalysts following the recent approval of the tax bill in Washington.
The latest economic data, which pointed to slight slowing from strong previous readings, further clouded the view.
What are indexes doing?
Futures for the Dow Jones Industrial Average were up 40 points at 24,779, while those for the S&P 500 index gained 3.4 points to 2,685. Futures for the Nasdaq-100 index rose 5.25 points to 6,493.75.
What's driving the market?
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Congress on Wednesday provided final approval of the tax bill, leaving only President Donald Trump to sign the bill into law.
Read:Tax cuts may deliver caffeine rush to economy, but jolt of adrenaline might not last long (http://www.marketwatch.com/story/tax-cuts-may-deliver-caffeine-rush-to-economy-but-jolt-of-adrenaline-might-not-last-long-2017-12-20)
Among the bill's many features, it includes a reduction in the corporate tax rate from 35% to 21%, which is expected to give U.S. companies a boost and speed up economic growth.
Read: 10 things you need to know about the new tax law (http://www.marketwatch.com/story/10-things-you-need-to-know-about-the-new-tax-law-2017-12-20)
What are strategists saying?
"The tax bill will help the bottom line of a lot of companies, but when we talk to companies, what we hear is that it is top-line growth they want to see," said Francis Gannon, co-chief investment officer at Royce Funds.
A company's bottom line, or profitability, can be boosted by lower tax rates or cost-cutting. However, revenue--the top line--requires higher demand to grow. Some analysts have questioned whether the tax bill will do much to boost demand or hiring.
"We don't see a recession or any kind of crisis on the horizon, but we're moving into a more normalized rate environment, and our thought process is that things are getting increasingly risky; this is a moment to be selective."
What's the latest economic data?
The U.S. economy's pace of growth in the third quarter (http://www.marketwatch.com/story/third-quarter-gdp-revised-down-slightly-to-32-rate-2017-12-21) was lowered slightly to a 3.2% annual rate from 3.3% under the government's final revision to gross domestic product. Economists were expecting GDP to be unrevised. The economy expanded at a 3.1% rate in the second quarter.
Separately, initial jobless claims rose a higher-than-expected 20,000 in the latest week, though they remain at historically low levels (http://www.marketwatch.com/story/jobless-claims-jump-by-most-since-early-september-2017-12-21).
On the upside, the Philadelphia Fed's Manufacturing Business Outlook Survey jumped to a reading of 26.2 in December (http://www.marketwatch.com/story/philly-fed-index-shows-accelerating-factory-momentum-in-december-2017-12-21) from 22.7. The mean estimate of analysts was for a reading of 21.8.
A report on leading indicators for November is slated for release at 10 a.m. Eastern.
See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
Which stocks are in focus?
Biogen Inc.(BIIB) fell 4.1% in premarket trading after the company put out a negative update (http://www.marketwatch.com/story/biogen-shares-drop-4-on-negative-update-for-alzheimers-disease-drug-2017-12-21-8912414) for its Alzheimer's disease drug.
Paychex Inc.(PAYX) reported second-quarter revenue that topped forecasts (http://www.marketwatch.com/story/paychexs-stock-falls-after-downbeat-profit-outlook-offsets-revenue-beat-2017-12-21), although it also gave a profit outlook that was below expectations. Shares fell 1.7% before the bell.
Read:Nike earnings: North America business may be starting to gain speed (http://www.marketwatch.com/story/nike-earnings-north-america-business-starting-to-just-do-it-again-2017-12-19)
Apple Inc.(AAPL) shares were down 0.3%. The tech giant on Wednesday admitted it slows down older iPhones (http://www.marketwatch.com/story/apple-admits-slowing-down-older-iphones-to-prevent-unexpected-shutdowns-2017-12-20) to prevent unexpected shutdowns.
Aeterna Zentaris Inc. (AEZS.T) soared 89% ahead of the bell after the biotech firm late Wednesday said the U.S. Food and Drug Administration had approved the company's Macrilen product for diagnosis of adult growth hormone deficiency.
Long Island Iced Tea Corp.(LTEA) said it would change its name to Long Blockchain Corp. Shares soared nearly 300% in premarket trading.
What are other markets doing?
Asian stocks closed mixed, while European stocks (http://www.marketwatch.com/story/european-stocks-drop-as-us-tax-optimism-fades-2017-12-21) mostly traded lower (http://www.marketwatch.com/story/european-stocks-drop-as-us-tax-optimism-fades-2017-12-21).
Oil and gold were also in the red, while the dollar index was flat around 93.307.
Bitcoin futures on the CME were down 2.4% at $16,625.
(END) Dow Jones Newswires
December 21, 2017 09:11 ET (14:11 GMT)