Wall St. extends recent gains; focus shifts to budget, tax reform
U.S. stocks rose to record highs again on Thursday, with optimism over a tax overhaul increasing as Congress moved closer to agreement on a budget resolution and as data added to recent signs of economic strength.
The U.S. House of Representatives voted to adopt a fiscal 2018 spending blueprint containing a legislative tool that would let Republicans bypass Democrats and pass a tax bill by a simple majority vote in the Senate, where they hold 52 of 100 seats.
Data pointed to underlying strength in the economy despite weather-related disruptions, with the trade deficit narrowing in August and jobless claims falling more than expected last week.
New orders for goods made in the United States rose in August and orders for core capital goods were stronger than previously reported.
Stocks also are benefiting from a move into riskier assets on Thursday, said Michael O`Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut, noting lower bond prices.
"People aren`t really selling while we`re at new highs. They`re trying to hang on to what they hold, so it`s a little easier to keep making incremental gains," he said.
Shares of Netflix
The S&P financial index <.spsy>, up 1.1 percent, led sector gains. Banks rose after Randal Quarles was confirmed as vice chair of the Federal Reserve. The banking sector widely expects Quarles to play a key part in U.S. President Donald Trump`s efforts to ease regulations.
The Dow Jones Industrial Average <.dji> rose 95.08 points, or 0.42 percent, to 22,756.72, the S&P 500 <.spx> gained 12.92 points, or 0.51 percent, to 2,550.66 and the Nasdaq Composite <.ixic> added 42.89 points, or 0.66 percent, to 6,577.52.
Investors are also looking ahead to the monthly jobs report on Friday and the upcoming third-quarter corporate earnings season.
Analysts expect earnings of S&P 500 companies rose about 5.5 percent in the quarter from a year earlier, according to Thomson Reuters data. That would be down from double-digit growth in the first two quarters of this year.
The benchmark S&P 500 is likely to finish this year at 2,525, about 13 percent higher than where it was at the end of 2016, based on the median forecast of 47 strategists polled by Reuters.
Advancing issues outnumbered declining ones on the NYSE by a 1.69-to-1 ratio; on Nasdaq, a 1.59-to-1 ratio favoured advancers.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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