Wall Street soars to unchartered territory for the umpteenth time this year
- Renewed tax reform hopes boosted US stocks on Tuesday.
- Financials recorded best daily rise in nearly nine months.
- N. Korea's ICBM launch hurt the market sentiment.
Major equity indexes in the U.S. started the day on a positive note and preserved their momentum to close at fresh all-time highs.
On Tuesday, the initial boost to stocks came from the Conference Board's consumer confidence data, which rose to its best level in 17 years. Although the indexes struggled to push higher during the mid-session after the headlines of North Korea launching an ICBM hurt the market sentiment, they regained traction on current developments surrounding tax talks. "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, told Reuters on Tuesday.
The S&P 500 Financials Sector (SPSY) soared 2.58% on the day, recording its best daily percentage gain since early March. After recording losses for four straight sessions, the S&P 500 Energy Sector (SPNY) staged a solid recovery and finished the day 0.82% higher. However, the uncertainty surrounding the OPEC/non-OPEC output cut deal extension could continue to weigh on crude oil prices and make it difficult for the SPNY to extend its upside in coming days.
The risk-sensitive S&P 500 Information Technology Sector (SPLRCT) underperformed as it only gained 0.18%. The CBOE Volatility Index, Wall Street's fear gauge, rose nearly 1% on N. Korea headlines.
According to the latest available data on Reuters, the Dow Jones Industrial Average added 255.93 points, or 1.09%, to 23,836.71, the S&P 500 rose 25.65 points, or 0.99%, to 2,627.07 and the Nasdaq Composite gained 33.84 points, or 0.49%, to 6,912.36.
DJIA technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, writes, "the index is strongly bullish according to technical readings in the daily chart, as indicators are entering overbought territory with sharp upward slopes as it moves further above all of its moving averages. Shorter term, and according to the 4 hours chart, the index is also extremely overbought, but there are no technical signs that it could change course for the time being. Further gains should be extended on an acceleration through the intraday high of 23,849."