Wall Street charges to a record close as North Korean missile launch taken in stride

PUBLISHED : Wednesday, 29 November, 2017, 7:46am
UPDATED : Wednesday, 29 November, 2017, 7:49am

Wall Street closed at a record high and the dollar rose on Tuesday as sentiment was buoyed by progress on US tax reform, strong economic data and comments by the nominee for chairman of the Federal Reserve.

US stocks had a volatile afternoon after news of a North Korean missile launch caused the S&P 500 to pare gains.

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But indexes regained ground as investors’ focused on progress for a US tax cut bill, and all three major indexes posted record closing highs.

The US Senate budget committee voted along party lines to send a Republican tax bill for a full Senate vote.

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“People are trying to move in front of what they think now is likely to be some tax reform on the corporate side,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

The S&P’s biggest boost came from financial stocks after Fed chair nominee Jerome Powell, in his Senate confirmation hearing, discussed potentially lightening regulation. He also said the best way to sustain the US economic recovery would be to continue gradual interest rate increases.

The Dow Jones Industrial Average rose 255.93 points, or 1.09 per cent, to 23,836.71, the S&P 500 gained 25.62 points, or 0.98 per cent, to 2,627.04, and the Nasdaq Composite added 33.84 points, or 0.49 per cent, to 6,912.36.

The pan-European FTSEurofirst 300 index rose 0.59 per cent and MSCI’s gauge of stocks across the globe gained 0.48 per cent.

The British pound briefly rallied more than 1 per cent from its lows after The Daily Telegraph newspaper reported that Britain and the European Union had agreed on the amount of the Brexit financial settlement, citing unidentified sources.

Sterling was last 0.31 per cent higher at US$1.3357.

The dollar index rose 0.35 per cent, with the euro down 0.44 per cent to US$1.1844.

America’s consumer confidence soars to a 17-year high on strong economy and labour market

On top of the policy news, the dollar was helped by data that showed US consumer confidence surged to a near 17-year high in November, driven by a robust labour market, and that home prices rose sharply in September, which should underpin consumer spending and boost economic growth.

“This is partly an unwind of some of the move we saw last week, which took place in the wake of the slightly more cautious minutes from the Fed and in an especially illiquid holiday market,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

US Treasury yields inched higher as risk appetite improved due to the consumer confidence data and the Senate panel vote to advance the tax bill.

Benchmark 10-year notes last rose 1/32 in price to yield 2.3259 per cent, from 2.328 per cent late on Monday. The 30-year bond last rose 7/32 in price to yield 2.7554 per cent, from 2.765 per cent late on Monday.

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Oil prices eased on uncertainty over the outcome of an Opec meeting this week at which an extension to Opec’s price-supporting oil output cuts will be discussed.

US crude fell 0.74 per cent to US$57.68 per barrel and Brent was last at US$63.28, down 0.88 per cent on the day. Spot gold dropped 0.1 per cent to US$1,293.74 an ounce.