Wall Street at record on rising hopes of tax overhaul

Wall Street at record on rising hopes of tax overhaul

2017-12-15 18:53:09

(Reuters) – Wall Street major indexes scaled new heights on Friday, with all the major sectors pushing higher as the long-awaited bill to lower corporate tax rates enters the final stretch.

The final Republican tax bill is to be unveiled in Congress later in the day, with the decisive votes from both the House of Representatives and the Senate expected next week.

Republican negotiators worked furiously to put the finishing touches on the bill and expanded a child tax credit in an effort to win the support of two wavering senators.

“People still think the tax bill will get done. I don’t think Republicans are going to let this by the wayside as they’ve come this far,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company.

The bill, which in its current form proposes to lower the rate to 21 percent from 35 percent, has been one of the catalysts for this year’s surge in the stock markets.

“Tax bill is moving the market in the short term, but the fundamentals that underlie that market, even without a tax reform, are giving investors confidence.”

At 12:17 p.m. ET (1717 GMT) the Dow Jones industrial average .DJI was up 0.6 percent, at 24,655.56. The S&P 500 .SPX was up 0.84 percent, at 2,674.4 and the Nasdaq Composite .IXIC was up 0.99 percent, at 6,924.30.

The S&P 500 and the Dow are on track to close higher for the fourth week in a row, while the Nasdaq was set to post its first weekly rise in three weeks.

The S&P consumer staples index .SPLRCS rose 1.24 percent, the most among the 11 major S&P sectors. Costco (COST.O) gained 3.75 percent after the retailer reported upbeat results.

Financial stocks .SPSY rose 1.11 percent, led by gains between 1.2 percent and 1.7 percent in the six biggest U.S. banks.

While the technology sector also gained, one notable decliner was Oracle (ORCL.N). The software maker slipped 4.34 percent after it gave a disappointing forecast for its cloud business.

CSX (CSX.O) tumbled more than 8 percent after the railroad said its Chief Executive Hunter Harrison was taking medical leave, amid its controversial turnaround plan.

Given that it is Quadruple Witching, trading volumes are expected to be higher than normal as the session progresses, with traders likely to close hedging positions of futures, options and stocks or roll them over at the last minute.

Advancing issues outnumbered decliners on the NYSE by 2,093 to 758. On the Nasdaq, 2,044 issues rose and 814 fell.

Reporting by Rama Venkat Raman and Sruthi Shankar in Bengaluru; Editing by Arun Koyyur and Savio D’Souza

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