S&P 500, NASDAQ, and Dow Rose Due to Hopes on Tax Reforms
After pulling back on Wednesday, the S&P 500 regained strength and rose to the highest levels in ten days. Renewed hopes about President Trump’s tax reforms and support from first quarter earnings releases supported the market rally.
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On Thursday, comments by Treasury Secretary Steven Mnuchin at the Institute of International Finance Washington Policy Summit increased expectations of tax reforms being implemented by the end of 2017. At the beginning of the week, Mnuchin said that it isn’t realistic to make the tax reform bill pass before August. On April 20, he commented that passing the tax bill won’t take until the end of the year. His comments strengthened the market and supported the rally on Thursday.
Support from earning reports
On Thursday, Alliance Data Systems (ADS), Quest Diagnostics (DGX), and Navient (NAVI) were the S&P 500’s top performers. Alliance Data Systems, which is a loyalty and marketing campaign provider, rose 8.3% and ended the day at 260.62—the highest close since January 2016. Strong first quarter earnings results supported the rally in Alliance Data Systems stock. According to reports, Alliance Data Systems’ first quarter revenue rose to $1.9 million—a gain of 12% YoY (year-over-year). The operating income rose 2.4% despite a 14.6% YoY gain in operating expenses.
The S&P 500 VIX Index (CBOE Volatility Index) measures uncertainty in the market. On April 20, it fell 0.14% to 14.13. It’s measured on a scale of 1–100 with 20 as the historical average. It’s also called the “fear index.” Generally, it moves opposite to stocks’ movements—it rises when the S&P 500 falls. The Dow Jones Industrial Average closed at 20,578.71—a gain of 0.85%. Like the S&P 500 and Dow Jones, the NASDAQ Composite Index closed positive on Thursday. It rose 0.92% on April 20 and closed the day at 5,916.78.