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Dow jumps more than 200 points
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The U.S. stock market extended its rally Tuesday, with the Dow jumping by triple-digits and the Nasdaq closing above 6,000 for the first time ever, as investors welcomed upbeat earnings and the possibility of corporate tax cuts.
The Dow Jones Industrial Average rose 232.23 points, or 1.1%, to end at 20,996.12 after five of its components reported quarterly results (http://www.marketwatch.com/story/dow-getting-an-87-point-boost-from-earnings-led-by-caterpillar-and-3m-stock-rallies-2017-04-25), with four of them coming in ahead of forecasts.
“Today is one of the busiest days in terms of corporate earnings releases, with 36 companies reporting before and after the market and so far earnings have been strong,” said Michael Antonelli, equity sales trader at Robert W. Baird & Co.
“While earnings have been driving markets higher, tax cuts would drive multiple expansion and so far it looks like the market is very optimistic on tax cuts,” Antonelli said.
(http://www.marketwatch.com/story/dupont-offers-downbeat-outlook-for-current-quarter-2017-04-25)Read: Trump seeks corporate tax rate of 15% in plan (http://www.marketwatch.com/story/trump-seeks-corporate-tax-rate-of-15-in-plan-2017-04-24)
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Caterpillar Inc.(CAT) lifted its full-year revenue outlook (http://www.marketwatch.com/story/caterpillar-shares-soar-after-first-quarter-earnings-beat-2017-04-25) and reported better-than-expected results, sending shares up 7.9%. Fellow Dow component DuPont(DD) rose 3.6% after topping analyst forecasts.
Fast-food giant McDonald’s Corp. (MCD) gained 5.6% after it served up first-quarter earnings (http://www.marketwatch.com/story/mcdonalds-shares-rise-after-earnings-beat-estimates-2017-04-25) that beat expectations. Coca-Cola Co. (KO)reported a drop (http://www.marketwatch.com/story/coke-expands-cost-cuts-after-latam-weakness-2017-04-25) in its first-quarter earnings and sales, and shares were off 0.4%.
The broader S&P 500 was up 14.46 points, or 0.6%, to finish at 2,388.61. Materials and energy led the gains. The rally left the Dow 0.6% below its all-time closing high set March 1, while the S&P 500 ended just 0.3% off its record close from the same date.
The Nasdaq Composite Index rose 41.67 points, or 0.7%, to close at a record 6,025.49, moving past the psychologically important milestone of 6,000 without much resistance. Tuesday’s settlement marked the index’s 24th record close of 2017.
Checkout: Nasdaq hits 6,000 for first time ever-marking historic milestone (http://www.marketwatch.com/story/nasdaq-hits-6000-for-the-first-time-evermarking-historic-milestone-amid-stock-market-rally-2017-04-25)
See: Are planets aligned for a renewed stock market rally? (http://www.marketwatch.com/story/are-planets-aligned-for-a-renewed-stock-market-rally-2017-04-24)
“If there is tax and regulatory reform, monies will flow back into the real economy defined as Main Street versus Wall Street. About two weeks ago, the short interest in the Russell 2000 rose by the greatest amount since 2008. Today the Russell 2000 is at a record,” said Kent Engelke, chief economic strategist at Capitol Securities Management Inc.
“The Russell 2000 is regarded as Main Street, and as indicated above, will directly benefit from tax and regulatory reform,” he said.
The Russell 2000 rose 13.13 points, or 0.9%, to a record close of 1,411.07. Its previous record close was on February 28 when it finished at 1,386.68.
Still, investors remain worried about a potential government shutdown on Saturday although some of those concerns may have eased after Trump backed off on a demand for border-wall funding (http://www.marketwatch.com/story/trump-backs-off-demand-for-immediate-border-wall-funding-2017-04-24), which was seen as an obstacle.
See:Should Wall Street fear a government shutdown? (http://www.marketwatch.com/story/should-wall-street-fear-a-government-shutdown-heres-how-stocks-fared-during-past-closures-2017-04-21)
Economic data:U.S. house prices continued to show no signs of slowing (http://www.marketwatch.com/story/us-house-prices-show-no-sign-of-slowing-2017-04-25), hitting their highest level in nearly three years as demand remained hot. Meanwhile, sales of newly-constructed homes (http://www.marketwatch.com/story/new-home-sales-roar-to-an-8-month-high-as-spring-selling-season-starts-with-a-bang-2017-04-25)rose to the highest in nearly a year in March as the housing recovery picked up steam.
Consumer confidence in the U.S. dipped slightly in April, but Americans are still far more optimistic than they were before the 2016 election, a survey showed.
Stock movers: A long list of companies are reporting on Tuesday. In addition to the Dow stocks, results from Biogen Inc (http://www.marketwatch.com/story/dupont-offers-downbeat-outlook-for-current-quarter-2017-04-25).(BIIB) lifted the biotech firm by 3.6%. Rite Aid Corp.(RAD) jumped 6.4% on an earnings beat (http://www.marketwatch.com/story/rite-aid-shares-jump-after-earnings-beat-2017-04-25).
Netflix Inc.(NFLX) shares rallied 5.8% after reporting it struck a licensing deal with a Baidu Inc.(BIDU) subsidiary to start streaming original content into China (http://www.marketwatch.com/story/netflix-has-found-its-way-into-china-through-licensing-deal-with-baidu-unit-2017-04-25).
Lockheed Martin Corp.(LMT) shares fell 2.2% after the company reported lower-than-expected revenues.
Eli Lilly & Co.(LLY)swung to a first-quarter loss (http://www.marketwatch.com/story/eli-lilly-swings-to-loss-on-higher-sales-cuts-2017-eps-view-2017-04-25), stemming from the drugmaker’s purchase of CoLucid Pharmaceuticals Inc. Shares fell 2.7%.
Straight Path Communications Inc.(STRP) rose 16% after the telecommunications company said that AT&T Inc. (T) has five days to match a “superior” buyout bid it has received. (http://www.marketwatch.com/story/straight-path-says-att-has-5-days-to-match-a-superior-buyout-bid-it-received-2017-04-25)
Tyson Foods (TSN) agreed to acquire (http://www.marketwatch.com/story/tyson-foods-to-acquire-advancepierre-foods-holdings-for-42-bln-2017-04-25-7914111)AdvancePierre Foods Holdings Inc.(APFH) in a deal valued at $4.2 billion. Shares of Tyson slid 0.4% while AdvancePierre surged 10%.
Read:Three infrastructure stocks to buy–regardless of Trump’s spending plans (http://www.marketwatch.com/story/three-infrastructure-stocks-to-buy-regardless-of-trumps-spending-plans-2017-04-25)
Other markets: European stocks rose modestly (http://www.marketwatch.com/story/european-stocks-snag-modest-gains-after-french-election-rally-2017-04-25) after the previous day’s rally, while in Asia equities climbed across the board (http://www.marketwatch.com/story/asian-stocks-build-on-gains-and-this-time-china-joins-in-2017-04-24).
Investors in Asia kept a close eye on tensions on the Korean Peninsula. North Korea marked the anniversary of the founding of its military with a large live-fire exercise, as a U.S. aircraft carrier strike group docked in South Korea as planned, Reuters reported (http://www.marketwatch.com/story/north-korea-reportedly-conducts-live-fire-exercise-as-us-submarine-docks-in-the-south-2017-04-25). There had been concerns that North Korea could mark Tuesday’s anniversary with another test of a long-range missile.
See:White House calls in all 100 senators for unusual briefing on North Korea (http://www.marketwatch.com/story/white-house-to-brief-full-senate-as-trump-calls-north-korea-real-threat-to-the-world-2017-04-24)
The dollar rose against the yen, but fell against the euro and British pound .
Oil prices (http://www.marketwatch.com/story/oil-rises-as-bargain-hunters-snap-to-attention-2017-04-25) firmed, while gold prices settled 0.8% lower.
–Barbara Kollmeyer and Ryan Vlastelica contributed to this article.
(END) Dow Jones Newswires
April 25, 2017 16:29 ET (20:29 GMT)