Stock Market News For Oct 23, 2017

Benchmarks closed at record levels on Friday after financial stocks gained after the Senate passed the budget blueprint for fiscal year 2018. Such news also bolstered gains for bank stocks. Economists commented that this move by the Senate cleared a big hindrance to the Republican efforts of rewriting the tax code. Meanwhile, existing home sales for September increased 0.7%.

The Dow Jones Industrial Average (DJIA) closed at 23,328.63, gaining 0.7%. The S&P 500 Index (INX) increased 0.5% to close at 2,575.21. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,629.05, increasing 0.4%. A total of 6.2 billion shares were traded on Friday, higher than the last 20-session average of 5.9 billion shares. Advancing issues outnumbered decliners on the NYSE by 1.55-to-1 ratio. On the Nasdaq, advancers outnumbered decliners by 1.58-to-1 ratio. The CBOE VIX increased 2.1% to close at 10.26.

Benchmarks Notch Up Record Close

The Dow advanced 165.59 points to end above the psychological 23,000 milestone yet again. Such gains were buoyed by shares of General Electric (NYSE:GE) which finished 1.1% higher on Friday. Meanwhile, the S&P 500 amassed 13.11 points to end in the green. Of the 11 major sectors of the S&P 500, nine ended in gains, with financials and industrials leading the advancers.

The Financial Select Sector SPDR ETF (NYSE:XLF) and the Industrial Select Sector SPDR ETF (NYSE:XLI) gained 1.2% and 1.1%, respectively. While a surge in GE’s shares bolstered gains for the industrials, financials stocks gained after Senate passed the budget blueprint for 2018, which, according to experts, almost ensured that tax reforms would be implemented. Bank stocks such as JPMorgan Chase and Co. (NYSE:JPM) and Citigroup (NYSE:C) gained from this developement and increased 1.4% and 0.9%, respectively. Both the companies possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Senate Passes the Budget Blueprint for FY 2018

In a 51-49 vote late Thursday, the Senate approved the budget blueprint for fiscal year 2018. Economists believe that such a move ensures taxpayers that existing tax codes could soon be rewritten. Such an outcome “unlocks” a procedure using which the tax code can be changed using only Republican votes. Moreover, the tax Bill can now be used to lower the projected revenue by almost $1.5 trillion over a ten-year period. Kentucky Senator Rand Paul was to be the only Republican to have voted against passage of the Budget.

Meanwhile, Senate Majority Leader Mitch McConnell from Kentucky commented that this move was ‘critical to getting tax reform done’ in order for pulling the economy out of ‘years of stagnation under the previous administration.’ Such amendments do not usually need the President’s signature and are not related to spending bills which generally fund the government. Democrats have always opposed rewriting of the tax code as they believe this would eventually benefit only the wealthiest section of the United States at the cost of not so financially sound citizens.

Economic Data

Existing home sales for the month of September came in at 5.39 million units, more than the consensus estimate of 5.31 million units. Existing home sales have surged 0.7% in the period, with the total number of available homes for sales surging 1.9%. Meanwhile, the median price of an existing home shot up 4.2% to $245,100 in September.

Weekly Roundup

For the week, the Dow, the S&P 500 and the Nasdaq gained 0.7%, 0.9% and 0.4%, respectively. While, the Dow and the S&P 500 registered their sixth straight week of gains, the Nasdaq posted gains for fourth week on the trot. This also marked the longest streak of weekly gains for the Dow after the blue-chip index posted seven weeks of gains in December. The S&P 500 also posted its longest streak of gains after its six-week rally ended in March.

President Trump chose not to certify Iran’s compliance with a nuclear deal struck in 2015. He reasoned that the country continued to ‘sponsor terrorism’ and in effect disrupted international peace. Meanwhile, the Dow Jones closed above 23,000 points for the first time ever in its 120-year history. The blue-chip index had closed above 22,000 for the first time on Aug 2. Moreover, robust third-quarter earnings results provided a fillip to the equity market, with corporations in the United States showing signs of strength on the back of an improving economy.

Stocks That Made Headlines

GATX Corp Surpasses Earnings and Revenue Estimates in Q3

GATX Corporation (NYSE:GATX) reported better-than-expected earnings per share and revenues in the third quarter of 2017. (Read More)

V.F. Corp Stock Gains on Q3 Earnings Beat, Rises Y/Y

V.F. Corporation’s (NYSE:C) third-quarter 2017 results marked its second consecutive quarter of both top and bottom-line beat. (Read More)

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