Stock indexes ticked higher on Wednesday, and the Standard & Poor’s 500 index flirted with its record high, as the White House unveiled a broad outline of its plan to cut tax rates.
The market has sprinted higher since November, due in large part to expectations that lower taxes and looser regulations for businesses are on the way. White House officials said Wednesday afternoon that they hope to cut the top corporate tax rate to 15 percent from 35 percent. The plan still has many specifics to be determined, such as how much it will affect the government’s budget deficit, and they will need to be negotiated with Congress.
KEEPING SCORE: The Standard & Poor’s 500 index rose 4 points, or 0.2 percent, to 2,393, as of 2:10 p.m. eastern time. Earlier in the day, it climbed a bit above its record closing level of 2,395.96, set early last month. When White House officials began talking about taxes in the early afternoon, it caused only minor ripples in the index’s movement.
The Dow Jones industrial average rose 40 points, or 0.2 percent, to 21,036, and the Nasdaq composite rose 5, or 0.1 percent, to 6,030.
THE TAX PLAN: Along with expectations for lighter regulations on business, hopes for lower taxes have been among the main drivers for the 11 percent sprint higher for the S&P 500 since Election Day.
White House officials laid out a broad outline for changing the U.S. tax code, including incentives that they said would encourage multinational companies to repatriate cash parked overseas. The proposed 15 percent rate on corporate taxes may be only a starting point for negotiations, but a tax rate even in the 25 percent range would mean fatter after-tax profits for companies, which could propel their stock prices even further.
Many investors say profits need to climb to justify the big gains that stock prices have made in recent years.
EARNINGS: This is a frenetic week for companies reporting how much they earned during the first three months of the year. More than a third of the businesses in the S&P 500 are slated to go this week.
Reports have been largely better than expected, and analysts expect this to be the strongest quarter of growth in years.
Edwards Lifesciences jumped to one of the largest gains in the S&P 500 Wednesday after it reported stronger revenue and profit for the latest quarter than analysts expected. The company also raised its profit forecast for the year. Its stock jumped $9.99, or 10.1 percent, to $108.91.
ANTE UP: Wynn Resorts jumped $7.75, or 6.6 percent, to $125.97 after reporting revenue and profits that topped expectations. The company saw stronger revenue from its Las Vegas casino, as well as its new Macau resort, which opened in August.
FLYING HIGHER: Twitter jumped $1.43, or 9.7 percent, to $16.09 after reporting stronger quarterly results than expected.
ROLLED: U.S. Steel plunged $7.91, or 25.4 percent, to $23.20 after it reported a loss for the first quarter and cut its profit forecast for the year.
FLAT: Dr Pepper Snapple Group dropped $4.09, or 4.2 percent, to $94.32 after its revenue for the latest quarter fell short of analysts’ expectations. Its profit nevertheless beat Wall Street’s forecast.
HARD FALL: Seagate Technology, a maker of hard drives and other storage products, sank $8.37, or 16.6 percent, to $42.14 after reporting weaker revenue for the latest quarter than analysts expected. Its profit nevertheless topped expectations.
MARKETS ABROAD: In Europe, the French CAC 40 rose 0.2 percent, the FTSE 100 in London added 0.2 percent and the German DAX was close to flat. In Asia, the Japanese Nikkei 225 jumped 1.1 percent, the South Korean Kospi rose 0.5 percent and Hong Kong’s Hang Seng added 0.5 percent.
COMMODITIES: Benchmark U.S. crude oil rose 6 cents to settle at $49.62 a barrel. Brent crude, which is used to price international oils, fell 37 cents to $52.20 a barrel.
Natural gas rose 10 cents to $3.14 per 1,000 cubic feet, wholesale gasoline fell 3 cents to $1.59 per gallon and heating oil fell 1 cent to $1.54 per gallon.
Gold fell $3 to $1,264.20 per ounce, silver lost 23 cents to $17.36 and copper rose 1 cent to $2.59 per pound.
CURRENCIES: The euro slipped to $1.0901 from $1.0939 late Tuesday, while the dollar rose to 111.30 Japanese yen from 111.09 yen. The British pound rose to $1.2855 from $1.2830.
BONDS: U.S. government bond prices rose. The yield on the 10-year Treasury note slipped to 2.31 percent from 2.34 percent late Tuesday.