US stocks surge to fresh records on tax cut progress

October 21, 2017 | By | Reply More

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NEW YORK: Wall Street stocks surged to fresh records Friday and boosted other equity markets after US lawmakers took a key step toward enacting the tax reform plan sought by President Donald Trump.

Investors were cheered by a party-line 51-49 vote in the Senate for a federal budget plan that permits the legislative body to pass the tax cut plan with a simple majority vote instead of a 60-person supermajority.

That lifted all three major US indices to records, with the Dow Jones Industrial Average rising 0.7% to 23,328.63.

“Optimism over some form of tax reform in the US has waxed and waned constantly since the beginning of the year, and while there still remains some way to go before a plan passes the house, the fact that some progress on a blueprint has taken place, can be seen as progress,” said Michael Hewson, chief market analyst at CMC Markets UK.

The news also boosted the dollar against other currencies, as the Senate vote “brought the Trump administration a step closer to advancing tax reform, a core tenet of the president’s agenda aimed at helping the economy shift into a higher gear that has long proven elusive,” said Western Union Business Solutions analyst Joseph Manimbo.

While the controversial proposals still have a long way to go before being passed, the news spurred Asian markets to life Friday after a plodding start to the day.

The Nikkei 225 inched up 0.04% to end at 21,457.64 points, rising for the 14th day straight to match a record set in 1961.

In Europe, EU leaders agreed to start preparations for the next stage of negotiations with Britain over Brexit.

As expected, the other 27 leaders agreed there had been insufficient progress on the divorce talks to officially move on to the future relationship with Britain, but still approved the start of internal preparations for post-Brexit trade and a transition deal.

“We also saw a slightly more positive tone out of Brussels with respect to the Brexit talks after German Chancellor Angela Merkel acknowledged that the EU side also needed to move on its negotiating position in the Brexit talks,” said Hewson.

“What also appeared to be significant was an admission by Donald Tusk that the separate internal EU27 talks on trade would take UK proposals into account,” he added.

Bourses in London, Paris and Frankfurt ended little changed.

Meanwhile, Spain’s IBEX 35 index added 0.3%, although tensions over Catalonia still ran high as Madrid prepared to seize powers from the regional government.

Key figures around 2100 GMT

New York – DOW: UP 0.7% at 23,328.63 (close)

New York – S&P 500: UP 0.5% at 2,575.21 (close)

New York – Nasdaq: UP 0.4% at 6,629.05 (close)

London – FTSE 100: FLAT at 7,523.23 points (close)

Frankfurt – DAX 30: FLAT at 12,991.28 (close)

Paris – CAC 40: UP 0.1% at 5,372.38 (close)

Madrid – IBEX 35: UP 0.3 at 10,222.7 (close)

EURO STOXX 50: UP 0.1% at 3,604.27

Tokyo – Nikkei 225: FLAT at 21,457.64 (close)

Hong Kong – Hang Seng: UP 1.2% at 28,487.24 (close)

Shanghai – Composite: UP 0.3% at 3,378.65 (close)

Euro/dollar: DOWN at $1.1781 from $1.1854 at 2100 GMT

Pound/dollar: UP at $1.3189 from $1.3153

Dollar/yen: UP at 113.51 yen from 112.56 yen

Oil – Brent North Sea: UP 52 cents at $57.75 per barrel

Oil – West Texas Intermediate: UP 18 cents at $51.47 per barrel
AFP

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