Wall St. extends record run on tax overhaul optimism, solid data
U.S. stocks notched record closing highs again on Thursday as investors cheered increased prospects for a tax overhaul with Congress moving closer to agreement on a budget resolution.
The day`s move extended a run of records that began last week.
The benchmark S&P 500 set a record-high close for the sixth straight day, its longest such run since an eight-day streak in June 1997. It also rose for eight sessions in a row, matching a winning streak from July 2013.
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.
"It really started to take off after news that the House passed a portion of the president`s plan," said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.
"I don`t know if that`s going to make it all the way through ... but you`re seeing it in higher Treasury yields, a better financial sector and technology."
The S&P technology index <.splrct>, up 1.1 percent, was the day`s top-performing sector, followed by financials, with that index <.spsy>, up 1 percent. The small-cap Russell 2000 <.rut> rose 0.3 percent. Small-cap names are seen as among the biggest beneficiaries of any tax cut.
Also helping stocks, more data pointed to underlying strength in the U.S. 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.
The Dow Jones Industrial Average <.dji> rose 113.75 points, or 0.5 percent, to close at 22,775.39, the S&P 500 <.spx> gained 14.33 points, or 0.56 percent, to 2,552.07 and the Nasdaq Composite <.ixic> added 50.73 points, or 0.78 percent, to 6,585.36.
It was the fourth day in a row where all three major indexes had hit record closing highs.
"Nobody likes to buy at all-time highs, but with the prospect of it going higher, you`re missing out, so you have to do some buying to stay competitive," Pavlik said.
Shares of Netflix
Also helping banks, 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 S&P bank index <.spxbk> was up 1.3 percent.
Bond yields rose, with the benchmark 10-year U.S. Treasury note yield
Friday brings the U.S. monthly jobs report, while investors are also anxious to see third-quarter corporate earnings reports.
Analysts expect earnings of S&P 500 companies rose about 6 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 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 1.55-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favoured advancers.
About 5.9 billion shares changed hands on U.S. exchanges. That compares with the 6.2 billion daily average for the past 20 trading days, according to Thomson Reuters data.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.