Stock prices advanced broadly on Thursday as investors stepped up buying turning yesterday's sell off into a temporary blip. Markets were buoyed by pleasing earnings from Walmart and Cisco. Also the House Republicans passed its $5.5 trillion tax bill moving it a step closer to a near-historic legislative tax overhaul.
Treasurys and dollar fall back as stocks gathered steam for the biggest gain in two months. The Bloomberg Dollar Spot Index nipped below 0.1%. The euro fell 0.2% to $1.1769 while the pound rose 0.1% to $1.3182. Intermediate crude decreased 0.31% to $55 a barrel where it has roughly held over the last two days. Investors are waiting to see if OPEC extends its output cuts at its 30 November meeting.
Wal-Mart led gainers striding up +10.92% after its better-than-expected earnings beat. Cisco also delivered an earnings beat rising +5.19%. The Dow was up +0.80% and was up +7.85% over three months and ten out of 12 sectors made gains. Defensive sector energy fell again on Thursday as slumping oil prices continue to weigh along with utilities. The S&P 500 advanced +0.82% within striking distance of its record close of 2,597.02 as technology stocks rallied. NASDAQ also rose +1.30%. Amazon and Apple were both up +0.94% and +1.19% at close.
- Dow 23,458.01 +0.80%
- S&P 500 2,585.67 +0.82%
- NASDAQ 6,793.31 +1.30%
- Russell 2000 1,487.35 +1.59%
- NYSE Composite 12,305.23 +0.69%
- Gold 1,278.5 +0.06%
- Oil WTI $55.17 -0.31% (4:01PM EST)
- 10-Year Treasury 2.36 -0.37%
Earnings and good economic data are what move markets according to market experts and the tech bull run is running on such feel-good earnings. NASDAQ performance is up +9.18% over the last three months and +26% year to date.
Gina Martin Adams, chief US equity strategist, Bloomberg Intelligence said on Bloomberg TV she remained optimistic about technology stocks in the future: " For tech frankly I think tech held up really well over the last few days. The breadth indicators on the NASDAQ have been extremely negative suggesting that we probably will see a greater sell off in tech emerge."
Martin Adams added that today's action, where some defensive sectors sold off more than tech there was nothing fundamentally showing really strong deterioration. She said, "A technically driven correction that will follow through to over sold conditions which will be a buying opportunity most likely."
Tax reform as cliffhanger
Who would ever have thought of US tax reform becoming like a TV serial with every episode a cliffhanger and the entire nation tuning in to see what happens next.
The latest instalment as events emerge from the Hill is that Republicans in the House of Representatives voted on Thursday to pass their version of a tax overhaul bill including a brace of tax cuts for individuals and businesses.
The next instalment will take place in the Senate which has to pass its tax plan with a slim majority most likely after the Thanksgiving Holiday. The passage of the Senate plan is seen as more problematic and potentially fractious as it now includes a repeal of the individual requirement to get healthcare insurance under the Affordable Care Act.