Sun, Oct 22, 2017 - Page 14 News List

Wall St hits record on tax plan hopes

‘HEALTHY’:The market is reacting to the thought that just maybe there might be something coming from Congress in the way of tax reform, a portfolio manager said

Reuters, NEW YORK

US stocks hit record closing highs on Friday and the S&P 500 posted a sixth week of gains after the US Senate passed a budget resolution, lifting hopes that US President Donald Trump’s tax-cut plan might move forward.

Shares of General Electric Co reversed an early drop of 6.3 percent to end 1.1 percent higher, and the S&P industrials index also finished up 1.1 percent.

The company’s new chief executive vowed to shed more than US$20 billion worth of assets after the company’s quarterly results badly missed Wall Street’s expectations.

The Senate’s approval late on Thursday of a 2018 budget blueprint could pave the way for Republicans to pursue a tax-cut package without Democratic support.

“It’s just a reaction to the thought that just maybe there might be something coming from Congress in the way of tax reform,” said Paul Nolte, portfolio manager at Kingsview Asset Management LLC in Chicago. “Everybody had kind of given up hope, and after the comments over the last 24 hours, people are like, shoot, this may actually happen.”

Stocks rallied following election of Trump in November last year, partly on his promises to cut taxes and reduce regulations.

The S&P index of financials, which are expected to benefit from the US administration’s proposed policies, rose 1.2 percent and its components were among the day’s best performers.

The small-cap Russell 2000 index gained 0.5 percent. Small-cap companies are likely to get a boost from tax reform.

The Dow Jones Industrial Average on Friday rose 165.59 points, or 0.71 percent, to end at 23,328.63, the S&P 500 gained 13.11 points, or 0.51 percent, to 2,575.21 and the NASDAQ Composite added 23.99 points, or 0.36 percent, to 6,629.05.

All three indices posted all-time closing highs, extending their recent run of records, and the Dow, which broke above 23,000 this week, rose 2 percent for the week. The Dow also registered a sixth week of gains while the NASDAQ posted its fourth.

The S&P 500 was up 0.9 percent for the week while the NASDAQ added 0.4 percent.

Some investors saw little reason to worry about the extended climb.

“This has been a healthy advance. It has been a slow, steady grind upward. There’s been extraordinarily low volatility,” said Hank Smith, cochief investment officer at Haverford Trust Co in Radnor, Pennsylvania.

Investors continue to monitor news on potential candidates for the US Federal Reserve chair position.

Boosting stocks late on Thursday, Politico reported that Fed Governor Jerome Powell is the leading candidate to become Trump’s nominee, which many would consider a continuation of the current stock market-friendly monetary policy.

Trump said in an interview with Fox Business Network on Friday that he was considering tapping both Powell and Stanford University economist John Taylor for the central bank’s top two posts.

Also on the earnings front, PayPal Holdings Inc’s stock rose 5.5 percent after upbeat earnings.

The pace of third-quarter reports should pick up next week, with results from Caterpillar Inc and other big names.

Advancing issues outnumbered declining ones on the New York Stock Exchange by a 1.55-to-1 ratio; on NASDAQ, a 1.58-to-1 ratio favored advancers.

About 6.2 billion shares changed hands on US exchanges on Friday. That compares with the 5.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.

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