U.S. stocks rose on Thursday as more companies released quarterly results while Treasury Secretary Steven Mnuchin said the administration was close to “major tax reform.”
Mnuchin, who this week backed off of his earlier goal of passing tax reform by August, said the White House will unveil a plan “very soon.” However, the Trump administration previously set deadlines for releasing its tax plan that it did not meet.
“If there is some sort of breakthrough, it will be positive” for stocks, said Edward Campbell, managing director for QMA, a multi-asset manager wholly owned by Prudential Financial. He added, however, investors may need to moderate their expectations regarding tax reform.
The Dow Jones industrial average rose more than 200 points, with Goldman Sachs and American Express contributing the most gains. The credit-card giant reported better-than-expected first-quarter earnings, lifted in part by higher spending numbers from card members.
“Corporate America is hanging in there despite softening economic data,” said Lindsey Bell, investment strategist at CFRA. “I know Verizon was a disaster but you got some pretty good results out of American Express and CSX.”
Verizon, another Dow member, missed the mark on both earnings and revenue. The company attributed a 5.1 percent drop in sales to decreased
Dow intraday chart
Railway company CSX posted better-than-expected results and said it expects profit to jump 25 percent this year. The stock rose more than 5 percent to lead the Dow transports, which popped more than 1.5 percent.
As of Thursday afternoon, 79 percent of the 82 S&P 500 components that had reported quarterly results topped earnings-per-share estimates, while 70 percent have topped sales expectations, according to FactSet data.
The S&P 500 gained 0.9 percent, with financials, industrials and materials rising more than 1 percent to lead advancers.
The SPDR S&P Regional Banking ETF (KRE) and the Bank ETF (KBE) rose more than 1.5 percent. Steel stocks also caught a bid after President Donald Trump said he directed the Commerce Department to prioritize a probe on foreign steel products’ effect on U.S. national security. Shares of U.S. Steel surged more than 8 percent.
The Nasdaq composite outperformed, rising 1 percent, and was on track to post a record close.