Nasdaq tops 6,000 as earnings boost Wall St; U.S. tax code eyed
EghtesadOnline: The Nasdaq Composite hit a record high on Tuesday, while the Dow and S&P 500 brushed against recent peaks as strong earnings underscored the health of corporate America.
Caterpillar (CAT.N) closed up 7.9 percent at $104.42 after earlier hitting a multi-year high of $104.89 and McDonald's (MCD.N) jumped 5.6 percent to $141.70, both after beating profit estimates, Reuters reported.
"It’s earnings coming from the Dow companies, the largest of the large, in particular Caterpillar, really driving on the theme that U.S. corporate profitability is on track to provide some significant year-over-year earnings growth. That in and of itself is a fantastic story," said Peter Kenny, senior market strategist at Global Markets Advisory Group in New York.
Overall profits of S&P 500 companies are estimated to have risen 11.4 percent in the first quarter, the most since 2011, according to Thomson Reuters I/B/E/S.
The Nasdaq hit a record level of 6,036.02, breaching 6,000 for the first time, powered by gains in index heavyweights Apple (AAPL.O) and Microsoft (MSFT.O).
The index first touched the 5,000 mark on March 2000 as tech stocks bubbled before tumbling nearly 80 percent through October 2002.
The Dow Jones Industrial Average .DJI rose 232.23 points, or 1.12 percent, to 20,996.12, the S&P 500 .SPX gained 14.46 points, or 0.61 percent, to 2,388.61 and the Nasdaq Composite .IXIC added 41.67 points, or 0.7 percent, to 6,025.49.
The Russell 2000 also hit an intraday record high.
The S&P 500 touched its day's high after the Wall Street Journal reported U.S. President Donald Trump's tax proposal, expected on Wednesday, would include a slash to 15 percent from 39.6 percent on many owner-operated companies.
"(Treasury Secretary Steven) Mnuchin has to have a better-articulated answer to what the tax code changes are in a meaningful way,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
She said cutting taxes on partnerships and owner-operated businesses would be a strong boost to investing.
Tuesday's gains built on a day-earlier rally, which was driven by the victory of centrist candidate Emmanuel Macron in the first round of the French presidential election. Polls showed Macron, the market's favorite, was likely to beat his far-right rival Marine Le Pen in a deciding vote on May 7.
About 7.31 billion shares changed hands in U.S. exchanges, above the 6.4 billion daily average over the last 20 sessions.
Advancing issues outnumbered declining ones on the NYSE by a 2.10-to-1 ratio; on Nasdaq, a 2.20-to-1 ratio favored advancers.
The S&P 500 posted 85 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 218 new highs and 43 new lows.