The Dow Jones industrial average closed about 40 points higher Thursday and the small-cap Russell 2000 index hit an all-time high after the release of the GOP's highly anticipated tax reform plan.
small-cap Russell 2000 index erased opening losses to hit an all-time
high of 1,489.35 and closed at a record 1,488.79 . Many market
strategists expect the smaller market capitalization stocks to benefit
more than large-cap stocks from tax reform.
"I think there's some
of the tax cut hope built into this rally but I think it's more a
function of rising interest rates and a stronger dollar," said Marc
Chaikin, CEO of Chaikin Analytics. "You've got a signal from the Russell
2000, which has been so strong, that's bullish for the S&P going
into year end."
The S&P 500 gained 3 points to a record close
of 2,510.06 , coming within 0.1 percent of its all-time high but failing
to hit an intraday record. The Nasdaq composite closed 0.2 points
higher, within 0.4 percent of its record. The Dow transports also edged
up to an all-time high.
"The market's just trying to gauge the
overall sentiment in the market [on tax reform], how much of that is
priced in and what the timing is going to be," said Dan Deming, managing
director at KKM Financial.
McDonald's rose more than 2 percent as
the biggest contributor to gains in the Dow after Longbow Research
raised its rating for the restaurant chain to buy from neutral on
expectations McDonald's sales will top Wall Street estimates.
and real estate stocks led S&P 500 advancers. Only the industrials
and consumer discretionary stock sectors closed lower, by less than 0.1
Financial stocks rose, with the SPDR S&P Bank ETF (KBE) posting its first 10-day win streak on record.
market is still fueled by liquidity and fundamentals," said Jack Ablin,
chief investment officer at BMO Private Bank. "Essentially if you look
at every major economy in the world, [they're] all expanding
Major technology-related stocks steadied Thursday
after large declines earlier in the week. Apple and Netflix closed less
than 1 percent lower, while Facebook and Amazon.com each closed about
0.6 percent higher.
Roku, which sells streaming video players, shot more than 50 percent above its IPO price in its first day of trading.
GOP tax plan released Wednesday breaks rates down into three categories
and cuts corporate tax rates. The plan also seeks to give companies a
break for profits stashed overseas while doubling the standard deduction
for most filers. Stocks closed higher Wednesday after struggling
intraday, with the Dow and S&P tracking for their eighth-straight
"There's still only broad strokes," said Robert
Pavlik, chief market strategist at Boston Private Wealth. "People want
to embrace some kind of news out of [Washington], D.C., but this doesn't
go far enough. So that's what led us to today['s market performance]."
yields came off session highs, with the 2-year yield near 1.45 percent
after hitting 1.499 percent, its highest since Nov. 4, 2008.The 10-year
yield traded near 2.31 percent after reaching 2.359 percent, its highest
since July 13. The 30-year Treasury yield briefly hit its highest since
The German 10-year bund yield briefly rose to near 0.49
percent. European stocks closed slightly higher. The euro traded near
$1.1782 with the U.S. dollar index near 93.2 after earlier hitting its
highest since Aug. 18.
"I do think there's going to be a point
when the [stock] market is going to look at rising yields," said John
Caruso, senior market strategist at RJO Futures. "There's speculation
out there the Fed is behind the curve as well."
"At this point I don't think the stock market wants to see a strong dollar, higher yields," Caruso said.
economic news, the final read on U.S. second-quarter gross domestic
product showed a 3.1 percent increase. Weekly jobless claims rose
slightly to 272,000.
Gold futures for December delivery settled up 90 cents at $1,288.70.
U.S. crude oil futures settled 1.1 percent lower at $51.56, falling from a five-month high.