BUSINESS Global stocks, dollar rise as US House OKs tax overhaul


Global stocks, dollar rise as US House OKs tax overhaul

Caroline Valetkevitch | Reuters

06:07, November 17, 2017


Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., November 15, 2017. REUTERS/Lucas Jackson

U.S. stocks rose and the dollar edged higher against a basket of major currencies on Thursday after the U.S. House of Representatives passed its version of a tax overhaul bill.

After five consecutive daily losses, the MSCI index of world stocks .MIWD00000PUS was up 0.8 percent, helped by U.S. stocks, which extended gains following the House vote. The Nasdaq hit a record high.

Stocks were already higher on earnings-related gains in Wal-Mart (WMT.N) and Cisco (CSCO.O).

The House approved a broad package of tax cuts affecting businesses, individuals and families, moving Republicans and President Donald Trump an important step closer to the biggest tax code overhaul in a generation.

“The tax plan isn’t a foregone conclusion but it passed the lowest hurdle in the House,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.

“The even higher hurdle is to have something pass in the Senate. The reconciliation will be the real measure if it happens,” he said.

The dollar index .DXY, which hit 93.813 on Wednesday, its lowest since Oct. 20, was also boosted by a general improvement in risk appetite across financial markets.

In late trading, the Dow Jones Industrial Average .DJI was up 192.29 points, or 0.83 percent, to 23,463.57, the S&P 500 .SPX gained 21.77 points, or 0.85 percent, to 2,586.39 and the Nasdaq Composite .IXIC added 91.73 points, or 1.37 percent, to 6,797.94.

Oil prices edged lower for a fifth day as rising U.S. production and inventories threatened to undermine a rally sparked by tightening world supply as a consequence of OPEC’s curbs on output.

U.S. crude CLc1 fell 19 cents to settle at $55.14 a barrel while Brent crude LCOc1 declined 51 cents to settle at $61.36.

U.S. Treasury two-year yields hit a nine-year high as risk appetite recovered globally and a batch of neutral to solid economic reports put the Federal Reserve on track to raise interest rates in 2018. [L1N1NM1A3]

U.S. two-year yields US2YT=RR climbed to a nine-year peak of 1.716 percent, from 1.691 percent on Wednesday, and the gap between 2-year note and U.S. 10-year note yields contracted to 63.2 basis points US2US10=TWEB, its tightest since 2007.

Benchmark 10-year notes US10YT=RR last fell 11/32 in price to yield 2.3718 percent, from 2.335 percent late on Wednesday.

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