Investing.com – The rally on Wall Street renewed as strong quarterly results inspired investors to pile to into equities on expectations that corporate earnings would continue to top expectations.
The Dow Jones Industrial Average closed higher at 23,435.93. The S&P 500 closed 0.16% higher while the Nasdaq Composite closed at 6598.43, up 0.18%.
With earnings season in full flow, Shares of Caterpillar closed nearly 6% while shares of Caterpillar added 5% after the two blue chips reported quarterly results that beat Wall Street estimates on both the top and bottom, lifting the main indices to record highs.
On the economic data front, investors cheered data pointing to underlying strength in the U.S. economy, fuelling expectations of a solid quarter of economic growth.
The Markit 'flash' US Manufacturing Purchasing Managers' Index (PMI) rose to 54.5 in October, from a reading of 53.1 in September, beating economist forecast of a reading of 53.5.
Services growth, meanwhile, continued to remain steady amid an uptick in staff hiring and business optimism during October. The 'flash' US Services Business Activity Index increased to 55.9, topping expectations for a reading of 55.6.
The rout in equities came under pressure, however, as infighting between Trump and Republican Senators threatened to derail the progress of pro-growth tax reform.
At least three Senators won't support a plan to cut taxes, CNBC reported on Tuesday. That could prove a huge stumbling block for tax reform as Republicans were expected to use a legislative tool called reconciliation, to move tax legislation through the Senate, in which they hold a 52-seat majority.
'Bulls and Bears' on Wall Street
The top Dow gainers for the session: 3M Company (NYSE:MMM) up 5.9%, Caterpillar Inc (NYSE:CAT) up 5% and American Express Company (NYSE:AXP) up 1.6%
International Business Machines (NYSE:IBM) down 2.3%, General Electric Company (NYSE:GE) down 1.9% and Johnson & Johnson (NYSE:JNJ) down 1.4%, were among the worst Dow performers of the session.