Surging banks lead Wall Street to highs as Trump tax plan advances

Wall Street surged to record highs on Tuesday led by sharp gains in bank stocks, and boosted by progress for a tax cut bill, strong consumer confidence data and encouraging comments from President Donald Trump’s nominee to lead the Federal Reserve. The S&P financial sector soared 2.6%, its biggest daily percentage increase since March 1.

WALL STREET surged to record highs on Tuesday led by sharp gains in bank stocks, and boosted by progress for a tax cut bill, strong consumer confidence data and encouraging comments from President Donald Trump’s nominee to lead the Federal Reserve.

The S& P financial sector soared 2.60%, its biggest daily percentage increase since March 1.

JP Morgan rose 3.50% and Bank of America gained 3.90%, while the S&P 500 banks index jumped 3.30%.

Mr. Trump’s push for a big package of tax cuts moved past a potential obstacle as a Senate panel approved the measure despite lingering concerns from some Republican members.

Wall Street is closely watching progress on the Republicans’ taxreform efforts, with hopes that corporate tax cuts will further fuel the record-setting rally for equities.

“People are trying to move in front of what they think now is likely to be some tax reform on the corporate side,” Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

The Dow Jones Industrial Average rose 255.93 points, or 1.09%, to 23,836.71, the S&P 500 gained 25.63 points, or 0.99%, to 2,627.05 and the Nasdaq Composite added 33.84 points, or 0.49%, to 6,912.36. All three indices notched record closing highs.

The small- cap Russell 2000, which is viewed as a barometer for tax reform’s chances, rose 1.50% and also tallied a record closing high.

In testimony before a Senate committee, Jerome Powell, nominated to replace Janet Yellen as Fed chair, defended the need to potentially lighten regulation on the financial sector. Mr. Powell overall presented himself as an extension of the Fed policies set under Ms. Yellen and her predecessor Ben Bernanke, confirming market expectations that he offered stability despite the change in Fed leadership.

Data showed that US consumer confidence surged to a near 17-year high in November, driven by a robust labor market, while house prices rose sharply in September in the latest encouraging reports about the US economy.

“Some of the data that we got today kind of confirms this goldilocks environment that we have,” said Anthony Saglimbene, global market strategist at Ameriprise in Troy, Michigan.

“Unemployment and interest rates are low, confidence and asset prices are high.” —