Dow breaks above 24,000 mark as tax Bill wins crucial support

Traders working on the floor of the New York Stock Exchange on Nov 29, 2017.
Traders working on the floor of the New York Stock Exchange on Nov 29, 2017.PHOTO: AFP

NEW YORK (REUTERS) - The Dow Jones Industrial Average pierced through the 24,000 mark for the first time on Thursday (Nov 30) and the other indexes rallied on strong indications that President Donald Trump’s tax-cut plan may get enough support for passage.

Republican US Senator John McCain said he would back the tax legislation under consideration by the Senate, saying he believes it will directly benefit all Americans.

McCain, who had voted against the healthcare overhaul effort this summer, is considered a critical vote for the Republican effort.

The blue-chip Dow index has crossed four similar 1,000-point milestones this year on the back of strong corporate earnings, robust economic data and hopes that Trump’s tax plan would make headway.

“The market is pushing higher as the tax reform gets closer to becoming a reality. The market is beginning to price in a higher certainty of tax reform happening and that is the big driver today,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management in Horsham, Pennsylvania.

At 10.48am ET, the Dow Jones Industrial average was up 144.91 points, or 0.61 per cent, at 24,085.59 and the S&P 500 was up 11.65 points, or 0.44 per cent, at 2,637.72.

The Nasdaq Composite was up 0.54 per cent to 6,861.25, a day after posting its biggest one-day drop in more than three months as investors rotated out of technology stocks.

Tech heavyweights such as Apple and Facebook , the worst hit in Wednesday’s sell-off, boosted the indexes on Thursday.

The S&P energy index’s more than 1 per cent rise led the advancers after Opec agreed to extend oil production cuts until the end of 2018.

Goldman Sachs jumped 2 per cent, while JPMorgan and Bank of America rose more than 0.5 per cent, tracking higher US treasury yields.

Kroger was the biggest S&P gainer, surging about 10 per cent after the supermarket chain forecast upbeat same-store sales for the holiday quarter and reported higher-than-expected results.

Reports that pointed to sustained increase in underlying price pressures and a drop in first-time applications for unemployment benefits also helped sentiment.

Advancing issues outnumbered decliners on the NYSE by 1,704 to 1,071. On the Nasdaq, 1,538 issues rose and 1,221 fell.