Wall Street advances on Friday on heightened expectations of tax overhaul

Eren Sengezer FXStreet

Following a positive start to the day, major equity indexes in the U.S. extended their upside as investors cheered the US Senate's approval of the 2018 fiscal year budget plan, which would open the door for the Republicans to go through with their tax reform without the support of the Democrats.

“It clearly is a positive and has added to the sentiment. Any legislative action that promotes economic growth, clearly will be additive to not only sentiment but presumably earnings,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, told Reuters. Boosted by a 3% gain witnessed in the US 10-year T-bond yields, the S&P 500 Financials Sector (SPSY) added more than 1% to become the best performing sector of the day.

In the meantime, after dropping to a weekly low at $50.70, the barrel of West Texas Intermediate staged a late recovery and turned positive on the week, allowing the S&P 500 Energy Sector (SPNY) to erase yesterday's losses.

Next week, 183 S&P 500 companies will be releasing their third-quarter earnings results. According to the latest data available on Reuters, more than 70% of the 88 S&P 500 companies, which have already released their reports, have surpassed profit expectations.

The Dow Jones Industrial Average gained 162.86 points, or 0.7%, to 23,325.91, the S&P 500 added 12.87 points, or 0.5%, to 2,574.97 and the Nasdaq Composite rose 23 points, or 0.35%, to 6,628.06.

Headlines from the NA session:

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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