Dow Jones hits record high as it passes 24,000 mark

Wall Street has finished November with a broad rally that gave the Dow Jones industrial average its biggest gain since March and pushed it past the 24,000 mark for the first time.

Other market indicators also reached milestones on Thursday. The Standard & Poor's 500 index, which is widely followed by professional investors, had its biggest monthly gain since February.

Technology stocks were responsible for much of the gain, following a sharp pull-back the day before.

Investors were encouraged by the latest batch of economic data pointing to a pick-up in global and domestic demand. But the run-up in the market really kicked in after developments in Washington gave traders fresh optimism that the Republican-led effort to forge a sweeping tax cut bill will succeed.

The S&P 500 index climbed 21.51 points, or 0.8%, to 2,647.58. The Dow jumped 331.67 points, or 1.4%, to 24,272.35. The average was briefly up more than 387 points.

The Nasdaq added 49.58 points, or 0.7%, to 6,873.97. The Russell 2000 index of smaller-company stocks picked up 1.84 points, or 0.1%, to 1,544.14. The major stock indexes all ended November with gains.

Stocks are being driven higher by a healthy economic backdrop and by the prospect that policy changes will fatten corporate profits.

The global economy is gathering momentum and a falling dollar has made American-made products cheaper overseas, benefiting US corporations. And recent economic data have given investors more reason to feel bullish.

The Commerce Department reported this week that the US economy grew at a 3.3% annual pace from July through September, the fastest in three years. Consumer spending and incomes posted healthy gains in October, the Labour Department reported.

American consumers, whose spending accounts for 70% of US economic output, are in the sunniest mood since 2000, their disposition brightened by a healthy job market. The unemployment rate is at a 17-year low of 4.1%.

The encouraging economic picture pushed the yield on the 10-year Treasury higher. It climbed Thursday to 2.41% from 2.39% late on Wednesday.

Investors are also enthusiastic about the Republican tax bill moving through Congress.

On Thursday, Republican senator John McCain, who derailed the GOP effort to dismantle the Obama health care law last summer, said he would back the tax bill.

The announcement was a major boost for the legislation, which would slash the tax on corporate earnings to 20% from 35%, reduce the likely taxes on foreign earnings and temporarily let companies immediately deduct the cost of investments from their taxes.

Traders have also welcomed the Trump administration's bid to reduce regulations, especially on financial firms, potentially boosting profits.

The president's choice to run the Consumer Financial Protection Bureau, Mick Mulvaney, is expected to go easier on banks than his predecessor, Richard Cordray.

Incoming Federal Reserve chief Jerome Powell likewise said he believes regulators can roll back some of the tougher bank rules imposed after the financial crisis.

On average, December is the best month for stocks. And while there are some warning signs and reasons for concern, analysts have solid reasons to think December 2017 will be pretty good.

AP


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