Small companies give stocks a lift
The major U.S. stock indexes finished mostly higher Wednesday, with small companies notching big gains as lawmakers in the House and Senate reached a deal on a taxoverhaul package.
The Dow Jones industrial average eked out its third record-high close in as many days, driven by a jump in Caterpillar. But a last-minute pullback in bank stocks left the Standard & Poor’s 500 index slightly lower.
The S&P 500 index slipped 1.26 points, or 0.05 percent, to 2,662.85. The index closed at all-time highs on Monday and Tuesday.
The Dow gained 80.63 points, or 0.3 percent, to 24,585.43. The Nasdaq added 13.48 points, or 0.2 percent, to 6,875.80. The Russell 2000 index of smaller-company stocks picked up 8.33 points, or 0.6 percent, to 1,524.45.
Packaged-food and beverage
stocks, health care companies and industrials accounted for much of the market’s modest gains. Banks struggled as long-term bond yields edged lower, which makes it tougher for banks to earn money from lending.
The decline in financial stocks came even as the Federal Reserve raised its benchmark rate for the third time this year. The move, which was widely expected, came as the central bank noted that the U.S. economy was on sound footing.
“Widely expected. No big surprises. No big changes,” said Tim Dreiling, regional investment director at U.S. Bank Wealth Management. “It’s encouraging that they continue to see economic growth continuing into 2018, which aligns with our thinking.”
Bond prices rose. The yield on the 10-year Treasury fell to 2.34 percent from 2.40 percent late Tuesday.
Trading got off to a subdued
start waited update Wednesday for from the the afternoon Fed. as investors policy
As expected, the central bank raised the federal funds rate — what banks charge one another for short-term loans — by 0.25 percentage point to a still-low range of 1.25 to 1.5 percent.
Developments out of Washington put investors in the mood to buy small-company shares about two hours before the Fed’s announcement.
Republican leadership in the House and Senate forged an agreement Wednesday on the GOP’s planned overhaul of the nation’s tax laws. The move paves the way for final votes next week to slash taxes for businesses and give many Americans modest tax cuts starting next year. Smaller companies stand to benefit most from a reduction in corporate tax rates because they tend to pay higher taxes than bigger corporations.
Packaged-food and beverage
gains. or Incyte percent, adding $148.57. 1.3 Health Caterpillar among companies percent, Coca-Cola $5.15, climbed The to care $98.10. industrials construction or to stocks 3.6 led posted $45.90. rose $2.70, percent, the also 61 stocks, or cents, gainers solid rose. and 2.8 to mining was the in Western Traders Dow. also equipment the also Digital biggest bid up company after gainer shares the in hard-drive-maker dispute over with Toshiba’s its partner plan resolved Toshiba to sell a its Western flash Digital memory rose business. $1.86, or 2.3 percent, to $83.63.
Investors also welcomed some corporate deal news.
Finisar jumped 22.8 percent after Apple said it will invest $390 million in the fiberoptic component supplier so it can make more lasers used in facial recognition technology. Finisar increased $4.40 to $23.70.