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US STOCKS-Wall St treads water ahead of tax bill, Fed chair pick
November 2, 2017 / 12:54 PM / a month ago

US STOCKS-Wall St treads water ahead of tax bill, Fed chair pick

* Fed Chair announcement expected at 3 p.m. ET

* Tax bill to be unveiled at 11:15 a.m. ET

* Facebook slips after warning on higher costs

* Tesla slumps after Model 3 delays, biggest-ever qtrly loss

* Dow up 5 pts, S&P down 0.75 pts, Nasdaq down 0.25 pts (Adds comment, updates prices, adds details)

By Sruthi Shankar and Tanya Agrawal

Nov 2 (Reuters) - Wall Street was set to open flat on Thursday as investors braced for the unveiling of a long-awaited tax bill and President Donald Trump’s decision on the next Federal Reserve chair.

After a one-day postponement, Republicans have made plans for a measure that will seek up to $6 trillion in tax cuts over 10 years but will likely not spell out completely how to offset them. A spokesman for House Speaker Paul Ryan said the tax bill would be made public at 11:15 a.m. ET (1515 GMT).

Trump is widely expected to nominate Fed Governor Jerome Powell from a list of five finalists that includes current Fed Chair Janet Yellen, Stanford University economist John Taylor, former Fed Governor Kevin Warsh and White House economic adviser Gary Cohn.

Powell has broadly supported Yellen’s monetary policy, and in recent years has shared her concern that low inflation justified continuing with a cautious approach to raising interest rates.

“I think a lot of it is priced in that Powell will be the choice. It’s the worst kept secret and it was done to not upset the market,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

Trump will announce his choice at 3:00 p.m. ET (1900 GMT) at the White House, according to his public schedule.

The leadership change comes amid a push toward tighter monetary policy among central banks around the world. The Bank of England on Thursday raised interest rates for the first time in more than 10 years.

The Fed on Wednesday kept interest rates unchanged but gave encouraging comments about the economy, signaling it was on track to lift borrowing costs again in December.

At 8:33 a.m. ET, Dow e-minis were up 5 points, or 0.02 percent, with 25,410 contracts changing hands.

S&P 500 e-minis were down 0.75 points, or 0.03 percent, with 151,439 contracts traded.

Nasdaq 100 e-minis were down 0.25 points on volume of 34,573 contracts.

Strong earnings have propelled stocks to new highs. Of nearly three quarters of the S&P companies that have reported, 73 percent have topped estimates, led by technology companies.

“I think the market is going to react more to earnings unless there’s a big surprise,” said Forrest.

Apple, the last major technology company to report, is scheduled to issue earnings after the bell. The stock was up 0.8 percent in premarket trading.

Facebook was down 1.29 percent after the company said it expected expenses to grow by between 45 percent and 60 percent next year.

Tesla dipped 5.20 percent after the electric car maker pushed back its target for volume production on its new Model 3 sedan by about three months, and reported its biggest quarterly loss ever.

FireEye tanked nearly 8.9 percent after the cybersecurity firm flagged loss for the fourth quarter hurt by shorter contract lengths. (Reporting by Sruthi Shankar and Tanya Agrawal; Editing by Sriraj Kalluvila)

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