By Yashaswini Swamynathan
REUTERS - U.S. stocks were on track to open higher on Tuesday, building on a day-earlier rally, spurred by a raft of strong corporate earnings and an expected tax reform plan.
Better-than-expected quarterly profits from Dow components, including Caterpillar and McDonald's, are likely to help the blue-chip index outperform other major Wall Street indexes in active trading.
President Donald Trump promised last week to make "a big tax reform and tax reduction" announcement on Wednesday. The President has directed his aides to move quickly on a plan to cut the corporate income tax rate to 15 percent from 35 percent, a Trump administration official said on Monday.
Investor sentiment took a turn over the weekend after centrist and pro-European Union candidate Emmanuel Macron won the first round of the French presidential election. Polls show Macron is likely to beat his far-right rival Marine Le Pen in a deciding vote on May 7.
Wall Street marked its best day since March 1 on Monday, with the Nasdaq edging close to the 6,000-point milestone, as the outcome of the vote increased risk appetite, while investors prepared for a busy week of corporate earnings.
"The French vote and Trump's plan to slash corporate taxes to 15 percent are two powerful forces that will still likely contribute to a positive trend as earnings prove to be better than expected," Peter Cardillo, chief market economist at First Standard Financial wrote in a note.
Of the 100 S&P 500 companies that have reported results so far, 77 percent have beaten profit expectations, according to Thomson Reuters I/B/E/S. Over the past four quarters, 71 percent of the companies had beaten estimates.
Dow e-minis were up 158 points, or 0.76 percent, at 8:22 a.m. ET (1222 GMT), with 30,659 contracts changing hands.
S&P 500 e-minis were up 6.75 points, or 0.28 percent, with 131,200 contracts traded.
Nasdaq 100 e-minis were up 17.25 points, or 0.31 percent, on volume of 23,255 contracts.
Biogen's shares jumped 4.6 percent in premarket trading, while Centene was up 1.4 percent after the two drugmakers reported quarterly profit and revenue that beat expectations.
Straight Path rose 6.3 percent after the company said a "multi-national telecommunications company" had offered $104.64 per-share, topping AT&T's bid of $95.63 per share.
Sandwich supplier AdvancePierre Foods jumped 9.2 percent after Tyson Foods said it would buy the company for about $3.2 billion in cash.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)
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