Stock index futures pointed to a modestly higher open on Wednesday, hours after U.S. President Barack Obama called for a lower corporate tax rate to boost the economy, but weakness in Boeing looked to limit gains.
In his State of the Union address to Congress Tuesday night, the president asked lawmakers to work with him to cut the corporate tax rate and simplify the tax code, moves that could lead to higher corporate profits.
It was a coin toss as to whether we would get that news on corporate taxes, and now that we have, it should give us an up day in stocks, said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.
That said, it probably won't be a ripping up day since who knows what the proposal will look like after all the negotiations and wrangling that goes into passing a bill.
The big question on Boeing is when they can deliver the new Dreamliner, and that question will weigh on the stock until we get some clarity, said David Carter, chief investment officer at Lenox Advisors in New York.
Fellow component United Technologies Corp
About 70 percent of S&P companies have beaten estimates so far, but worries that inflation could cut into profits have caused investors to jump on shares of companies that only produced spectacular results.
S&P 500 futures rose 3.2 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 11 points. Nasdaq 100 futures rose 5.75 points.
Investors awaited comments from the Federal Reserve, which is expected to nod to an improving economic outlook as it reaffirms a plan to buy $600 billion in government debt to help speed a recovery. The comments will be released Wednesday afternoon.
New home sales data for December, expected at 10 a.m. EST (1500 GMT) will be watched for signs of life in the beaten-up sector. They were expected to have risen to 300,000 from 290,000 the month before, a Reuters poll found.
U.S. stocks erased losses in a late flurry of buying to end little changed on Tuesday as overall optimism about earnings offset disappointing results from blue chips 3M Co
(Editing by Jeffrey Benkoe)