The Dow Jones industrial average smashed the 24,000 mark and then some as an abundance of news from Capitol Hill, world economies and the U.S. national economy sent stock indexes to rousing heights.
The Dow was up 359 points, about 1.5 percent midday Thursday, and the Standard & Poor’s 500-stock index was having its best day since March.
Markets responded positively to reports that Republicans were making progress on President Trump’s legislation to reduce corporate taxes. News reports that Sen. John McCain (R-Ariz.) was backing the plan gave supporters hope that the GOP may get enough votes for passage.
Reports that North Korea had tested a nuclear missile capable of reaching the U.S. mainland failed to douse the enthusiasm.
Goldman Sachs, Intel and United Technologies were leading the Dow in intraday trading Thursday.
“It’s all about tax reform,” said Ivan Feinseth, chief investment officer at Tigress Financial Partners. “You increase corporate earnings, the stock price goes higher.”
Oil companies such as Chevron and Exxon were up on news from Vienna, where the Organization of the Petroleum Exporting Countries and Russia, two of the world’s leading oil producers, agreed to extend an cut in crude production another year. Oil cuts translate into higher prices for a barrel of oil, which in turn lift oil company profits.
Financial stocks were bolstered by a rise in U.S. Treasury yields, which helps lenders make more money. State Street Corp. was up 1 percent and JPMorgan Chase was up 1.65 percent in afternoon trading.
The U.S. Labor Department reported Thursday morning that the number of Americans filing for unemployment benefits fell for a second week. The U.S. jobless rate is at a 17-year low.
The Commerce Department reported that Americans’ spending grew 0.3 percent in October, its fastest pace in nearly a decade. U.S. personal incomes rose even as inflation stays stubbornly low.
“Besides tax reform, which is moving faster than anyone expected just a week ago, the global economy continues to improve,” said Ryan Detrick, senior market strategist with LPL Financial. “There’s a lot of positives in the U.S., but we are seeing extremely strong earnings in developed countries and emerging markets. The last time we saw positive news on all three of those was 2010. There is very little chance of recession next year.”
New reports Wednesday said the U.S. economy was at peak performance, with growth in the last two quarters exceeding 3 percent. Many observers believed that a growth rate exceeding 3 percent was unattainable.
Shares of grocery giant Kroger were up more than 8 percent after the company beat earnings estimates.
“We are in a booming economy,” Feinseth said. “It is incredible that there is a global synchronization of world economies right now. You have a number of world markets hitting new, all-time highs.”