Wall Street heads higher as investors eye tax-cut benefits
Wall Street`s main indexes rose on Thursday on hopes that lower corporate tax rates would allow companies to deploy additional capital on dividends, new projects and wages.
Both houses of Congress approved the tax bill on Wednesday that included slashing corporate tax rate to 21 percent from 35 percent.
A number of companies, including AT&T, Wells Fargo and Boeing, have promised higher pay for workers or more investment in training. Some others have forecast a rise in earnings due to tax cuts.
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Investor sentiment also got a boost from data that showed U.S. economy grew at its fastest pace in more than two years in the third quarter.
Gross domestic product expanded at a 3.2 percent annual rate last quarter, the Commerce Department said, and was poised for what could be a modest lift next year from sweeping tax cuts passed by Congress.
Jobless claims increased more than expected last week, but the underlying trend remained consistent with a tightening labor market.
The S&P 500 has risen by about 20 percent this year, its best yearly performance since 2013, and has climbed about 5 percent since mid-November, led by a rally in sectors such as transport and banks that are expected to benefit the most from lower taxes.
At 9:34 a.m. ET (1434 GMT), the Dow Jones Industrial Average was up 72.29 points, or 0.29 percent, at 24,798.94 and the S&P 500 was up 7.2 points, or 0.27 percent, at 2,686.45. The Nasdaq Composite was up 16.80 points, or 0.24 percent, at 6,977.76.
The S&P financial index rose 0.62 percent, gaining the most among the 11 major S&P sectors. Banks are seen as the biggest beneficiaries of the cuts.
Utility sector was the lone decliner, down 1.5 percent.
Wells Fargo gained 1.53 percent, providing the biggest boost to the Dow, and a 1.4 percent jump in Goldman Sachs lifted the Dow.
Accenture jumped 3.7 percent to $157.40 after the consulting and outsourcing services provider reported strong quarterly profit driven by digital and cloud services business.
Nike`s shares edged up 1.4 percent. The company is scheduled to report after market closes.
Bed Bath and Beyond tanked about 13 percent after the company said comparable sales fell 0.3 percent in the third quarter.
Advancing issues outnumbered decliners on the NYSE by 1,714 to 796. On the Nasdaq, 1,569 issues rose and 692 fell.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)