Trump tax talk lifts Wall St to record high
Feb 9 (Reuters) - Wall Street's three main indexes surged to fresh record highs on Thursday after President Donald Trump said he would make a major tax announcement in a few weeks.
"Lowering the overall tax burden on American business is big league," Trump said during a White House meeting with airline industry executives. He gave no indication of what the announcement might entail.
The benchmark S&P 500 has rallied 7.9 percent since Trump's Nov. 8 election amid expectations he will usher in lower corporate taxes, but also reduce regulations and increase infrastructure spending. The rally had stagnated in recent days as investors sought details about Trump's policy agenda.
Financials, which have soared since the election, were the best-performing group, up 1.4 percent after three sessions of declines, while energy shares gained 0.9 percent.
Those sectors stand to benefit should lower taxes spur economic activity as interest rates and the demand for energy rise, said Bruce McCain, chief investment strategist at Key Private Bank, in Cleveland.
"Given the groups that responded and the enthusiasms within the market, it seems to be the tax comments that lit off the rally today," said Bruce McCain, chief investment strategist at Key Private Bank, in Cleveland.
The Dow Jones Industrial Average rose 118.06 points, or 0.59 percent, to 20,172.4, the S&P 500 gained 13.2 points, or 0.58 percent, to 2,307.87 and the Nasdaq Composite added 32.73 points, or 0.58 percent, to 5,715.18.
All three indexes closed at all-time highs.
The utilities sector, which is considered a defensive bet, fell 0.8 percent, the worst-performing group.
After the market drifted sideways for a couple weeks, "now here we are at levels on the S&P where we have broken through overhead resistance at the 2,300 level," said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina. "It means the market could continue to grind higher from here."
The focus on Washington comes with U.S. companies in the midst of their corporate reporting season.
With about 70 percent of the S&P 500 having reported results, fourth-quarter earnings are on track to have climbed 8.5 percent, which would be the best performance since the third quarter of 2014, according to Thomson Reuters I/B/E/S.
Shares of Viacom, Kellogg and Prudential all gained after their respective quarterly results.
Coca-Cola forecast a surprise drop in full-year profit. Its shares fell 1.8 percent.
Twitter tumbled 12.3 percent after the social network reported its slowest quarterly revenue growth since going public in 2013.
Intel shares fell 2.5 percent, dragging on the Dow and the S&P, as the chipmaker held its annual analyst day.
Airline stocks rose, with JetBlue, Delta and American Airlines up more than 2 percent, after Trump's meeting with airline executives.
About 6.9 billion shares changed hands in U.S. exchanges, above the 6.7 billion daily average over the last 20 sessions.
Advancing issues outnumbered declining ones on the NYSE by a 1.91-to-1 ratio; on Nasdaq, a 2.61-to-1 ratio favored advancers.
The S&P 500 posted 40 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 134 new highs and 23 new lows. (additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)