Wall Street gains on reduced rate hike fears, Nasdaq breaks record

NEW YORK: Wall Street forged higher on Thursday (Aug 31), with the Nasdaq hitting a new record while oil stocks shrugged off hurricane worries and economic data suggested another interest rate increase was less likely.

Photo source: AFP

And markets were cheered after Treasury Secretary Steven Mnuchin also said he expects to complete a tax reform plan this year, with a substantial reduction in taxes paid by corporations.

The blue-chip Dow Jones Industrial Average added 55.67 points (0.25 per cent) to hit 21,948.10, while the broader S&P 500 jumped 14.06 ponts (0.57 per cent) to finish at 2,471.65.

The tech-heavy Nasdaq had a new record close, rising 60.35 points (0.95 per cent) to end at 6,428.66.

With the increases, all three indices have swung back into positive territory for the month after being shaken by North Korean missile launches, White House sabre rattling and monster storm Harvey.

“We’ll see what happens tomorrow as we turn the calendar over to September,” Art Hogan of Wunderlich Securities told AFP.

Although Friday is the last trading session for before the end-of-summer holiday, the key government report on monthly job creation is due out just before the open.

“That will get a lot of attention except it’s a Friday before a long weekend.”

In data Thursday, the Commerce Department reported that the Personal Consumption Expenditures price index, which the Federal Reserve watches most closely, rose 0.1 per cent in July, with one 12-month measure hitting its slowest pace in 20 months.

Despite strong GDP growth in the second quarter, doubts have intensified in recent weeks about the likelihood the Fed will approve a third rate hike before the end of the year in the face of persistently weak inflation.

Meanwhile, Mnuchin told CNBC the Trump administration expected to finalize tax reform and get it through Congress in the next four months. “Things got delayed a bit but we’re on a track to get this done by the end of the year,” he said.

Peter Cardillo of First Standard Financial said Mnuchin’s remarks cheered investors. “Tax reform, that is obviously positive for corporate America,” he told AFP.

And despite the fact 16.6 per cent of US crude refining capacity remains off line in the aftermath of Hurricane Harvey, oil stocks still rose, with BP adding a full percentage point, ConocoPhillips gaining 0.6 per cent and ExxonMobil up 0.3 per cent.

Source AFP



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