Home Business US, world stocks climb on US. data, tax plan optimism
Leading global stock markets climbed on Thursday, fueled by a boost in bank and energy shares coupled with overall investor optimism after the recent passage of a $1.5 trillion tax cut plan in Washington.
Investors were hopeful the Republican-backed tax legislation, which slashes corporate income tax rates to 21 percent in the most dramatic overhaul of its kind in more than three decades, prompts companies to deploy additional capital on dividends, new projects and wages.
“There’s still the after-effects of tax reform being passed,” said Michael Antonelli, managing director at Robert W. Baird in Milwaukee. “I get the sense that the market is very optimistic about next year.”
Energy <.SPNY> and financial <.SPSY> stocks led gains among the 11 major S&P sectors. Energy, in particular, had underperformed in 2017.
The Dow Jones Industrial Average rose 55.64 points, or 0.23 percent, to close at 24,782.29, the S&P 500 gained 5.32 points, or 0.20 percent, to 2,684.57 and the Nasdaq Composite added 4.40 points, or 0.06 percent, to 6,965.36.
MSCI’s gauge of stocks across the globe gained 0.24 percent. The pan-European FTSEurofirst 300 index rose 0.66 percent.
Solid economic growth data from the U.S. Commerce Department also helped boost stocks. The U.S. economy grew at its fastest rate in more than two years in the third quarter and was poised for a slight boost next year from the tax bill.
U.S. Treasury yields held at lower levels, with 10-year yields scaling back from a nine-month peak, providing a respite from a sharp three-day bond market selloff tied to the tax plan, as investors began bargain hunting.
In Europe, the premium investors demand for holding Spanish bonds over top-rated German peers fell to its lowest in almost three months as Catalonia held an independence election.
Euro zone bond yields held near multi-week highs mostly on the U.S. tax code overhaul vote and passage.
The U.S. dollar inched lower in light trading, with investors pausing ahead of the holidays and attempting to digest the implications of U.S. tax reform.
The dollar index <.DXY>, tracking the greenback against a basket of major currencies, fell 0.05 percent, with the euro <EUR=> up 0.04 percent to $1.1874. The greenback was on track to post its worst annual performance in 14 years.
Spot gold <XAU=>, which benefits on a weakened dollar, added 0.1 percent to $1,266.88 an ounce. U.S. gold futures <GCcv1> gained 0.06 percent to $1,270.40 an ounce.
Brent oil prices rose enough to close at the highest since the summer of 2015 as the Organization of the Petroleum Exporting Countries started work on plans for an exit strategy from its deal to cut crude supplies
Source: News agencies