Stocks surge to record high, buoyed by tax cut hopes
Investors powered stocks to record highs, cheered by hopes for tax cuts and robust holiday spending figures.
The Senate Budget Committee voted 12-11 to pass the Republican tax plan Tuesday. The sweeping measure, which would lower corporate tax rates, now advances to the full Senate. GOP leaders hope to have the Senate take it up later this week.
All four major indexes closed at all-time highs.The Standard & Poor's 500 index rose 26 points, or nearly 1 percent, to finish at 2,627, while the Dow Jones industrial average added 256 points to 23,837. The Nasdaq composite gained 34 points to 6,912. The Russell 2000 index of smaller-company stocks picked up 23 points to 1,536.
A strong start to the holiday shopping season, a key period for manufacturers, retailers and other businesses, is also stoking confidence on Wall Street.
"The start of the holiday spending season looks to be a bit better than expectations and that's translating all the way down to the financial (stocks)," said Rob Stein, CEO of Astor Investment Management.
After the traditional kickoff to the holiday shopping season over the Thanksgiving holiday, Americans spent $6.6 billion on "Cyber Monday." That made it the biggest ever day for e-commerce sales in the U.S.
Bank of America jumped 3.9 percent Tuesday and JPMorgan Chase rose 3.5 percent. Banks rose after Federal Reserve chair nominee Jerome Powell said the Fed would consider easing up on financial regulations. Industrial companies also posted solid gains.
Despite concerns in some quarters of Wall Street that stock valuations are overstretches, signs suggest Americans are generally feeling bullish about the economy. The Conference Board's Confidence index surged in November to its highest level in 17 years, buoyed by optimism about improving job prospects, rising home prices and increasing equity values.
