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Wall Street gains on data and Mnuchin tax reform remarks
August 31, 2017 / 11:43 AM / 3 months ago

Wall Street gains on data and Mnuchin tax reform remarks

NEW YORK (Reuters) - U.S. stocks closed higher on Thursday as investors reacted to economic data and took cautious hope from Washington’s latest promises for long-awaited details of a tax reform plan.

The S&P 500 has been building momentum this week, notching five days of gains for the first time in three months as investors showed confidence a day after the benchmark closed above its 50-day moving average. This was a technical level that acted as resistance in the past week.

“People are coming back from vacation and noticing the market is near its all-time highs still, that a hurricane and all the North Korea bluster didn’t impact it,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

“There’s no doubt that the market is still in an uptrend. We’ve been throwing all sorts of bricks into the wall of worry and it’s still reaching for the sky.”

The Dow Jones Industrial Average .DJI rose 55.67 points, or 0.25 percent, to end at 21,948.1, the S&P 500 .SPX gained 14.06 points, or 0.57 percent, to 2,471.65 and the Nasdaq Composite .IXIC added 60.35 points, or 0.95 percent, to 6,428.66.

For the month, the S&P edged up 0.05 percent while the Dow gained 0.28 percent and Nasdaq rose 1.27 percent.

U.S. Treasury Secretary Steven Mnuchin said on Thursday that President Donald Trump’s administration has a detailed plan on tax reform and is on track to implement it by year-end. On Wednesday Trump reiterated his call for a U.S. corporate tax rate cut to 15 percent from 35 percent.

“Even if investors aren’t taking him at his word they expect him to do all he can. This is a market that has heard tax reform so often. It wants to see if they can deliver,” Quincy Krosby, chief market strategist at Prudential Financial in Newark, NJ.

Investors were also focused on economic indicators such as Wednesday’s gross domestic product data.

The Texas flag is displayed to show support for victims of hurricane Harvey as a trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 31, 2017. REUTERS/Brendan McDermid

Data released Thursday showed annual inflation advanced at its slowest pace in more than 1-1/2 years, diminishing expectations of an interest rate increase in December. And U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.3 percent last month compared with forecasts of 0.4 percent.

The data “reinforced the belief that the bull market is still intact,” according to Robert W. Baird’s Antonelli.

Also investors awaited the monthly jobs report on Friday to gauge the strength of the labor market and look for clues on the Federal Reserve’s next move on interest rates.

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Ten of the 11 major S&P sectors were higher, with the health index’s .SPXHC 1.5 percent rise leading the advancers.

UnitedHealth’s (UNH.N) 1.5 percent gain provided the biggest boost to the Dow. The Nasdaq biotech index .NBI rose 2.8 percent, with the biggest boosts coming from Gilead (GILD.O), Celgene (CELG.O) and Biogen (BIIB.O), all of which rose more than 3 percent.

Dollar General (DG.N) fell 5.4 percent after reporting a slide in second-quarter margins.

Campbell Soup (CPB.N) slid 8.1 percent, the biggest percentage loser on the S&P, after the company warned that sales for fiscal 2018 could fall.

The S&P 500 posted 49 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 117 new highs and 21 new lows.

About 6.2 billion shares changed hands on U.S. exchanges on Thursday compared with the 5.8 billion average for the last 20 sessions.

Additional reporting by Sruthi Shankar and Tanya Agrawal in Bengaluru and Chuck Mikolajczak in New York; Editing by Saumyadeb Chakrabarty and James Dalgleish

Our Standards:The Thomson Reuters Trust Principles.
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