Wall Street closes at record highs as tax bill hopes fuel gains
- Dow Jones broke above the 24K mark for the first time.
- Energy shares surged on OPEC output cut deal extension.
- Sen. John McCain's support increases the odds of tax bill passing the Senate.
Major equity indexes in the U.S. recorded substantial gains on Thursday amid heightened expectations of the tax overhaul bill passing the Senate. "After careful thought and consideration, I have decided to support the Senate tax reform bill. I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long-overdue tax relief for middle-class families," Republican Sen. John McCain said in a written statement.
Commenting on today's market action, “I think the key driver today is the tax reform. We just heard Senator McCain come out and say he will be supporting the bill. There was some uncertainty around which way he would go this time,” Mona Mahajan, U.S. Investment Strategist, Allianz Global Investors in New York, told Reuters.
The S&P 500 Industrials Sector (SPLRCI), which is forecasted to benefit the most from corporate tax cuts, closed the day 1.5% higher. Financial shares reacted positively to the developments as well with the S&P 500 Financials Sector (SPSY) finishing the day at a fresh all-time high at 455.61 after gaining 0.55%.
In the meantime, although crude oil prices failed to take advantage of OPEC's decision to extend oil production cuts to the end of 2018, the S&P 500 Energy Sector (SPNY) added 1.5% on the day.
According to the latest available data on Reuters, the Dow Jones Industrial Average rose 322.54 points, or 1.35%, to 24,263.22, the S&P 500 gained 21.09 points, or 0.8%, to 2,647.16 and the Nasdaq Composite erased almost all of its losses from the previous session as it added 46.98 points, or 0.69%, to 6,871.37. For the month, the indexes were up 3.8%, 2.8% and 2.2% respectively.