Wall Street hits record high on boost from tech, healthcare (Update 1)

  • Markets
  • Monday, 02 Oct 2017

A Pinterest banner hangs on the facade of the New York Stock Exchange (NYSE) in New York City, U.S., September 22, 2017. REUTERS/Brendan McDermid

BENGALURU: All the three major US stock indexes were hovering near record highs on Monday morning, in a strong start to the fourth quarter, boosted by technology and healthcare stocks and after data pointed to underlying strength in the economy.

However, shares of casino operators were lower, while those of gunmakers were higher after a gunman killed at least 50 people in Las Vegas on Sunday in the largest mass shooting in US history.

Investors have pinned hopes on President Donald Trump’s tax reform plan, which envisages lowering corporate tax to 20%.

“There is a sense of optimism that something will get done on corporate tax reform now that healthcare has been finally put to bed, if you will,” said Nadia Lovell, US Equity Strategist, J.P. Morgan Private Bank.

“The fact is that you’re also seeing a proposal to include a reduction of individual tax rates... so we think that the consumer will have more dollars to put to work in the economy.”

The Institute for Supply Management (ISM) said on Monday its index of national factory activity surged to a reading of 60.8 last month, the highest reading since May 2004, from 58.8 in August.

Dollar rose against a basket of currencies after the data and Fed chair Janet Yellen’s recent speech that suggested the odds of an interest rate hike in December remain high.

Trump has promised a decision this month on who is likely to be the new chief of the US central bank and has met with former Federal Reserve governor Kevin Warsh and three others.

Nine of the 11 major S&P indexes were positive on Monday, led by healthcare and technology sectors.

Boosting the broader index was Johnson & Johnson, Gilead Sciences among healthcare stocks and Microsoft and Intel among tech.

But the gains were tempered by a drop in energy.

The energy sector was down 0.75%, led by Exxon Mobil and Chevron, after a rise in US drilling and higher Opec output put brakes on a rally that helped prices register their biggest third-quarter gain in 13 years.

At 11:18am EDT the Dow Jones industrial average was up 61.83 points, or 0.28%, at 22,466.92, the S&P 500 was up 5.01 points, or 0.20%, at 2,524.37 and the Nasdaq Composite was up 21.50 points, or 0.33%, at 6,517.46.

Shares of Nordstrom fell 5% following a New York Post report that talks to take the department store operator private were faltering, dragging down rivals’ shares.

Advancing issues outnumbered decliners on the NYSE by 1,540 to 1,249. On the Nasdaq, 1,714 issues rose and 1,064 fell. - Reuters
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