Stocks rise on solid earnings, tax optimism; Nasdaq closes at record

The stock market ended with solid gains Thursday, with the Nasdaq closing at a record, as investors welcomed a deluge of stronger-than-expected corporate earnings reports and economic data.

Comments by Treasury Secretary Steven Mnuchin, who said that President Donald Trumps tax overhaul plans arent linked to the outcome of a health care bill, also bolstered sentiment, analysts said.

The S&P 500
SPX, +0.76%
climbed 17.67 points, or 0.8%, to finish at 2,355.84. Financials and materials led gainers.

The Dow Jones Industrial Average
DJIA, +0.85%
gained 174.22 points, or 0.9%, to end at 20,578.71. American Express Co.
AXP, +5.92%
was the best performer among blue-chips, jumping 5.9% following earnings. Both the S&P and the Dow ended a two-day skid.

The Nasdaq Composite
COMP, +0.92%
meanwhile, rose 53.74 points, or 0.9%, to a record close of 5,916.78.

There is a lot of good news when it comes to earnings and economic data and not only in the U.S. but overseas as well, said Karyn Cavanaugh, senior market strategist at Voya Financial.

Mnuchin, speaking at an Institute of International Finance conference, said a Trump tax bill is likely to be unveiled in the near future, alleviating fears that the tax cuts promised by the president may have been put on the back burner after the Republicans failed to vote on the American Health Care Act last month.

[His] comments today were icing on the cake and are giving investors confidence that the long term economic backdrop will be getting better, said Cavanaugh.

Reports earlier of a potential breakthrough among key House Republicans to secure more support for their health care bill had also contributed to markets upside momentum given Trump had previously prioritized repealing and replacing Obamacare over other policy changes.

The market got a little aggressive on the news given the domino effect that the health care bill would have, said Mark Kepner, managing director of sales and trading at Themis Trading.

Economic front: Initial jobless claims rose by 10,000 to a still-low 244,000 in mid-April. Meanwhile, the number of out-of-work people collecting unemployment checks fell to a 17-year low last week, underscoring the strongest U.S. labor market in years.

The manufacturing index from the Philadelphia Fed slid in April, but from high levels, suggesting slower growth in the factory sector after a postelection surge.

Federal Reserve Governor Jerome Powell, speaking about capital markets and the economy, said now was a good time to review the raft of banking regulations put in place since the financial crisis.

Stocks to watch: Steel stocks rallied on President Trumps announcement of a government probe into whether foreign steel imports are harming national security. U.S. Steel Corp.
X, +7.35%
jumped 7.4%, AK Steel Holding Corp.
AKS, +8.60%
soared 8.6% and Steel Dynamics Inc.
STLD, +6.76%

Shares of Philip Morris International Inc.
PM, -3.45%
fell 3.5% after the company fell short of earnings and first-quarter profit expectations.

Foot Locker Inc.
FL, +5.37%
shares initially fell but rebounded to trade 5.4% higher even after the athletic apparel group issued a profit warning.

Verizon Communications Inc.
VZ, -1.08%
shares fell 1.1% after the telecom company reported first-quarter earnings that missed Wall Street expectations.

5 companies to watch this earnings season(0:38)

We are about to get our quarterly peek at company financials. Here's what to look for.

EBay Inc.
EBAY, -3.91%
shares dropped 3.9% after earnings.

Qualcomm Inc.
QCOM, +0.10%
shares edged up 0.1% after the chip designer beat earnings expectations.

Other markets: The Nikkei 225 Index
NIK, -0.01%
rose for a fourth straight session, leading a recovery for Asia markets
ADOW, +0.47%
European stocks
SXXP, +0.22%
were higher, while the U.K.s FTSE 100 index
UKX, +0.06%
finished in the red.

However, the French CAC 40 index
PX1, +1.48%
rallied more than 1% after a Harris Interactive poll signaled a win for centrist Emmanuel Macron in Sundays first-round presidential election.

Read: Heres how Frances hotly contested election could spark market turmoil

West Texas Intermediate crude
CLK7, -0.36%
futures for May extended losses. Futures suffered their largest decline in weeks on Wednesday after a surprise climb in U.S. gasoline supplies.

Gold prices
GCM7, -0.06%
and the U.S. Dollar Index
DXY, -0.01%
were both little changed.

Barbara Kollmeyer contributed to this report.

Leave a Reply

Your email address will not be published. Required fields are marked *