USA close: Stocks rise amid tax reform optimism

Andrew Cummings
August 23, 2017

The Dow Jones Industrial Average added almost 200 points in its biggest jump since late April.

Investors had been moving away from expensive stocks in recent weeks, after share prices hit record highs earlier in the summer.

Threats between the US and North Korea, as well as turbulence in Washington that amplified investors' doubts about the Trump administration's ability to enact agenda items like a tax overhaul, have weighed on stocks this month.

Winners and Losers: Shares of DSW Inc. soared 17.46 percent after the footwear retailer's earnings report and same-store sales beat investors' expectations. Companies are mostly finished reporting quarterly results and profits and revenue were stronger than expected.

"It's the strength of the economy, not just here, but globally, that matter most to stocks", said Lew Piantedosi, director of growth equity for Eaton Vance.

The Dow Jones Industrial Average .DJI rose 196.14 points, or 0.9 percent, to 21,899.89, the S&P 500 .SPX gained 24.14 points, or 0.99 percent, to 2,452.51 and the Nasdaq Composite .IXIC added 84.35 points, or 1.36 percent, to 6,297.48. Earnings reporting season is nearly over; about 95% of companies in the S&P 500 have already said how much they earned during the spring quarter.

Macy's announced the hiring of a former eBay executive as its president and shares rose 4.56 percent.

The Dow briefly fell below its 50-day moving average, while the S&P 500 remained below the 50-day technical level.

About 5.24 billion shares changed hands in US exchanges, below the 6.28 billion daily average over the last 20 sessions. The yield on the 10-year Treasury note dipped to 2.19 percent from 2.20 percent late Friday. The euro declined to $1.1808 from $1.1815.

Investors are also looking for positive hints on USA monetary policy from Federal Reserve Chair Janet Yellen on Friday at the annual central bankers meeting in Jackson Hole, Wyoming, though observers do not expect her to give new guidance.

"We've been conditioned to expect something out of Jackson Hole each year", said Krishna Memani, OppenheimerFund's chief investment officer.

USA stock-market indexes opened higher on Tuesday, with the S&P 500 and Dow industrials on track for a second straight day of advances.

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