US stocks hit records as Trump signals action on tax cuts

People walk by the New York Stock Exchange (NYSE) on Feb 3, 2017, in New York City.
People walk by the New York Stock Exchange (NYSE) on Feb 3, 2017, in New York City.PHOTO: AFP

NEW YORK (AFP) - Wall Street stocks jumped to fresh records Thursday (Feb 9) as President Donald Trump promised to release a much-anticipated plan for tax cuts soon.

All three major US stock indices closed at new highs, with the Dow Jones Industrial Average rising 0.6 per cent to end the day at 20,172.40.

The broad-based S&P 500 gained 0.6 per cent to 2,307.87, and the tech-rich Nasdaq Composite Index also advanced 0.6 per cent to 5,715.18.

The rally was jump-started by Trump's comments at a meeting with airline executives, saying he would release details of a "phenomenal" tax cut plan in the next two or three weeks.

Wall Street investors cheered the statement, which also came on a strong day for European equities.

However, analysts said US volume was depressed due to a major New York snow storm that kept many traders at home.

"I think there's enthusiasm" behind the trading, said Jack Ablin, chief investment officer at BMO Wealth Management. "We're going to get some sort of boost."

Trump's statements reassured investors who have been searching for signs he will follow through on the growth aspects of his agenda after much of the first three weeks of his term were consumed with controversial stances on immigration and trade.

Sectors with strong gains included banks, energy and retail.

Airlines also took flight, with American, Delta and Southwest all winning more than two percent after Trump said an infrastructure spending plan would boost investment in airports.

Twitter dived 12.4 per cent after reporting a fourth-quarter loss of US$167 million following only modest gains in the number of users on the social network. The results suggested Twitter's prospects have not materially improved despite Trump's frequent use of the platform.

Dow member Coca-Cola fell 1.8 per cent after projecting lower 2017 earnings per share and a drop in the fourth quarter of last year.