U.S. stocks hovered near record levels on Wednesday ahead of a highly anticipated tax plan, while a flood of quarterly earnings reports kept investors busy.
President Donald Trump is proposing to slash the corporate tax rate and offer multinational businesses a steep tax break on overseas profits brought into the United States, officials said late on Tuesday.
U.S. Treasury Secretary Steven Mnuchin told CNBC that the business tax rate would be cut to 15 percent under the plan and that there was fundamental agreement with Congress on tax reform goals. The administration is expected to release details of the plan later on Wednesday, he said.
The promise of a massive tax cut has been at the core of the post-election rally, which has driven Wall Street’s indexes to record highs. However, the rally has stalled of late due to a lack of clarity on Mr. Trump’s policies and the failure of his healthcare reform bill.
“We think the market is pricing in fairly significant tax relief and that means there is real potential for the tax bill to disappoint,” said Matthew Peterson, Chief Wealth Strategist at LPL Financial.
“Certainly, the market has room to run, provided that the tax plan is credible and likely passed through Congress.”
At 12:36 p.m. ET (1636 GMT), the Dow Jones Industrial Average was up 55.1 points, or 0.26 percent, at 21,051.22.
The S&P 500 was up 5.23 points, or 0.22 percent, at 2,393.84. The index had come within just two points of its all-time high of 2,400.98 earlier in the day.
The Nasdaq Composite was up 5.59 points, or 0.09 percent, at 6,031.09, easing from a record intraday high of 6,039.28.
Seven of the 11 major S&P sectors were higher, led by a 0.8 percent rise in healthcare. The sector got the biggest boost from Thermo Fisher and Edwards Lifesciences , both of which surged on strong results and upbeat forecasts.
United Technologies rose 1.8 percent and provided the biggest boost to the Dow, after reporting a quarterly profit that beat expectations.
On the flip side, Boeing shares fell about 1 percent and weighed on the Dow after the planemaker reported a decline in revenue.
Procter & Gamble declined 2 percent after reporting lower quarterly profit.
Advancing issues outnumbered decliners on the NYSE by 1,860 to 1,004. On the Nasdaq, 1,769 issues rose and 972 fell.
The S&P 500 index showed 71 52-week highs and two lows, while the Nasdaq recorded 174 highs and 13 lows.