U.S. stocks closed higher Thursday, with earnings-inspired gains by Cisco and Wal-Mart helping to set the pace, while House passage of a Republican-sponsored tax cut plan helped cement the rally.
What are the main benchmarks doing?
The Dow Jones Industrial Average
ended with a gain of 187.08 points, or 0.8%, at 23,458.36 after rising as much as 221 points earlier in the session. The S&P 500
climbed 21.02 points, or 0.8%, to finish at 2,585.64. The S&P 500 telecom and consumer staples sectors were top gainers.
The tech-heavy Nasdaq Composite Index
jumped 87.08 points, or 1.3%, to finish at a record 6,793.29.
On Wednesday, the Dowand the S&P 500both closed 0.6% lower, and the Nasdaq Compositegave up 0.5%. The S&P and Dow suffered their biggest percentage drops since Sept. 5, with analysts blaming the fall on worries about a U.S. tax overhaul. In addition, a slide in oil prices on Wednesday put pressure on energy stocks.
What drove the market?
The passage of the tax bill was widely expected but it does not enjoy bipartisan support and in all likelihood, the final version is likely to look much different given that the Senate Finance Committee is proposing a bill that differs with it in key areas.
Read: House passes tax overhaul as spotlight turns to Senate
Strong gains by Wal-Mart and Cisco lifted the Dow, while Ciscos rise also helped fuel the Nasdaq gains.
What are strategists saying?
U.S. stocks took a cue from a rebound by European equities, which broke their longest losing streak in a year, said Kristina Hooper, global markets strategist at Invesco. That suggested investors were becoming more comfortable with the global growth picture after some previous unease, she said, and underscored that recent market action hasnt been dictated solely by concerns surrounding tax-cut legislation.
At the same time, stocks could be vulnerable to a downturn if tax legislation falters, she said, arguing that the administrations call for a cut in the corporate rate to 20% from 35% and allowing companies to immediately expense equipment purchases are key features.
Analysts said stocks could struggle following this weeks earlier pullback.
Traders are trying to figure out whether todays positive move is just a bounce back or the beginning of the next upward move. US equities have enjoyed a very bullish run lately, so a pullback would not be a surprise, said David Madden, market analyst at CMC Markets, in a note.
How did other assets fare?
ended at two-week lows, still shadowed by an unexpected rise in weekly crude output.
The ICE U.S. Dollar Index
inched up, while gold futures
notched a small gain. The 10-year Treasury yield
Read: This chart suggests U.S. Treasury yield will follow its Chinese peer higher
Which stocks were key movers?
Shares of Dow component Cisco Systems Inc.