MARKET SNAPSHOT: Stock Market Cements Gains As House Passes Tax-cut Bill

By Sue Chang and William Watts, MarketWatch Features Dow Jones Newswires

Nasdaq poised to close at record high

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U.S. stocks extended gains Thursday afternoon, with the Nasdaq trading at an all-time high after the House of Representatives passed a Republican-sponsored tax bill that is the first step toward long-awaited corporate tax cuts.

What are the main benchmarks doing?

The Dow Jones Industrial Average rose 208 points, or 0.9%, to 23,480. The S&P 500 climbed 23 points, or 0.9%, to 2,588. The S&P 500 telecom and consumer staples sectors were top gainers.

The tech-heavy Nasdaq Composite Index was up 95 points, or 1.4%, to 6,801, topping 6,800 for the first time.

On Wednesday, the Dow and the S&P 500 both closed 0.6% lower (http://www.marketwatch.com/story/dow-futures-tumble-more-than-100-points-as-mood-for-risk-sours-2017-11-15), and the Nasdaq Composite gave up 0.5%. The S&P and Dow suffered their biggest percentage drops since Sept. 5, with analysts blaming the fall on worries about a U.S. tax overhaul. In addition, a slide in oil prices on Wednesday put pressure on energy stocks.

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What is driving the market?

The passage of the tax bill was widely expected but it does not enjoy bipartisan support and in all likelihood, the final version is likely to look much different given that the Senate Finance Committee is proposing a bill that differs with it in key areas.

Read:House passes tax overhaul as spotlight turns to Senate (http://www.marketwatch.com/story/house-passes-tax-overhaul-as-spotlight-turns-to-senate-2017-11-16)

What are strategists saying?

U.S. stocks took a cue from a rebound by European equities, which broke their longest losing streak in a year, said Kristina Hooper, global markets strategist at Invesco. That suggested investors were becoming more comfortable with the global growth picture after some previous unease, she said, and underscored that recent market action hasn't been dictated solely by concerns surrounding tax-cut legislation.

At the same time, stocks could be vulnerable to a downturn if tax legislation falters, she said, arguing that the administration's call for a cut in the corporate rate to 20% from 35% and allowing companies to immediately expense equipment purchases are key features.

Analysts said stocks could remain vulnerable to further weakness following this week's earlier pullback.

"Traders are trying to figure out whether today's positive move is just a bounce back or the beginning of the next upward move. US equities have enjoyed a very bullish run lately, so a pullback would not be a surprise," said David Madden, market analyst at CMC Markets, in a note.

What are other assets doing?

Oil futures (http://www.marketwatch.com/story/oil-prices-stabilize-after-prior-days-slump-showing-little-change-2017-11-16) lost ground, after earlier showing a small gain. Crude prices are trying to stabilize after a fall on Wednesday (http://www.marketwatch.com/story/oil-tumbles-further-in-wake-of-api-reading-showing-jump-in-us-supply-2017-11-15) that was attributed to a surprise climb in U.S. supplies.

The ICE U.S. Dollar Index (http://www.marketwatch.com/story/dollar-drops-as-fears-build-that-tax-reform-plans-will-drag-2017-11-15) was inching up, while gold futures were off.

Which stocks were key movers?

Shares of Dow component Cisco Systems Inc.(CSCO) jumped 6.4% a day after the maker of networking equipment delivered better-than-expected quarterly results and an encouraging outlook (http://www.marketwatch.com/story/cisco-shares-surge-as-earnings-outlook-top-street-views-2017-11-15).

Don't miss:Cisco promises return to growth, but for how long? (http://www.marketwatch.com/story/cisco-promises-return-to-growth-but-for-how-long-2017-11-15)

Fellow Dow component Wal-Mart Stores Inc.(WMT) climbed 10.3% in the wake of the retailer posting stronger-than-expected earnings (http://www.marketwatch.com/story/wal-marts-stock-jumps-toward-record-high-after-profit-and-sales-beat-raised-outlook-2017-11-16) early Thursday.

Read more:Wal-Mart's in-store and digital sales put it a step ahead (http://www.marketwatch.com/story/wal-mart-earnings-in-store-and-digital-sales-put-it-a-step-ahead-of-the-competition-2017-11-13)

The retail giant has been a strong performer throughout 2017, up more than 33%. That stands in contrast to retail overall, with the SPDR S&P Retail ETF (XRT) down more than 7% in 2017.

See:Here's how tied retail stocks are to Black Friday and holiday shopping (http://www.marketwatch.com/story/heres-how-tied-retail-stocks-are-to-black-friday-and-holiday-shopping-2017-11-16)

NetApp Inc.(NTAP) soared 14% after the data-storage company's better-than-expected results (http://www.marketwatch.com/story/netapp-shares-jump-on-earnings-sales-beat-2017-11-15) late Wednesday.

Retailer Best Buy Co.(BBY) fell 4.7% after it reported revenue that came in below analyst forecasts and gave a weak profit outlook (http://www.marketwatch.com/story/best-buy-shares-slide-after-revenue-miss-weak-earnings-outlook-2017-11-16).

Folgers and Pillsbury parent J.M. Smucker Co.(SJM) rose 9.9% after it reported earnings that came in above analyst forecasts (http://www.marketwatch.com/story/jm-smucker-shares-jump-23-premarket-as-earnings-top-estimates-2017-11-16).

Media giant Viacom Inc.(VIA) fell 3.9% after it reported its quarterly results (http://www.marketwatch.com/story/viacom-blows-past-estimates-sending-stock-up-12-premarket-2017-11-16).

Away from earnings-related moves, Procter & Gamble Co.'s stock (PG) gained 1.3% following news that storied activist investor Nelson Peltz had narrowly won a seat (http://www.marketwatch.com/story/activist-nelson-peltz-narrowly-wins-seat-on-pg-board-2017-11-15) on the consumer-products giant's board.

Auto maker Tesla Inc.'s stock (TSLA) rallied 3.4% ahead of the unveiling of its electric semi truck (http://www.marketwatch.com/story/four-things-tesla-needs-to-reveal-when-it-launches-the-semi-truck-2017-11-15) that is on tap after the market's close.

See:Elon Musk opens up on love life, traumatic childhood, Tesla goals (http://www.marketwatch.com/story/elon-musk-opens-up-on-love-life-traumatic-childhood-tesla-goals-2017-11-15)

Goldman Sachs Group Inc.(GS) and Morgan Stanley(MS) both advanced 1% on the day. Earlier, there was news of a lawsuit that alleges those two banks and other lenders secretly shared client information (http://www.marketwatch.com/story/lawsuit-alleges-goldman-other-big-banks-shared-client-info-to-rig-us-treasurys-auctions-2017-11-16) to rig auctions for the U.S. Treasury market.

What economic releases are investors watching?

Initial jobless claims rose a higher-than-expected 10,000 in the latest week (http://www.marketwatch.com/story/us-jobless-claims-jump-to-6-week-high-2017-11-16), hitting a six-week high, although they remain at historically low levels. Continuing jobless claims were at their lowest since Dec. 1973.

Separately, U.S. import prices rose 0.2% in October, while industrial production rose 0.9% in October (http://www.marketwatch.com/story/industrial-production-surges-in-october-tops-forecast-2017-11-16), above the 0.6% growth that had been expected.

The National Association of Home Builders said its monthly confidence gauge rose two points to 70 (http://www.marketwatch.com/story/home-builder-confidence-climbs-to-8-month-high-in-november-nahb-says-2017-11-16)in November.

Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

On the Fed front, Cleveland Fed President Loretta Mester said that demographic change in the U.S. will result in a slower-growing and older population (http://www.marketwatch.com/(S(o54cffqhipqemynavg0qd455))/story/fed-must-pay-attention-to-trend-toward-older-population-mester-says-2017-11-16), and that the Federal Reserve must be alert to the impact of this transition on economic growth and interest rates.

Dallas Fed President Rob Kaplan was due to participate in a discussion at a CFA Society of Houston event at 1:10 p.m. Eastern, while Fed Gov. Lael Brainard is scheduled to talk at a University of Michigan Law School conference at 3:45 p.m. Eastern. San Francisco Fed President John Williams is addressing a forum on Asia in the City by the Bay at 4:45 p.m. Eastern.

Now read:CEO Bill McNabb reveals 'probably the thing we worry most about at Vanguard' (http://www.marketwatch.com/story/ceo-bill-mcnabb-reveals-probably-the-thing-we-worry-most-about-at-vanguard-2017-11-16)

(http://www.marketwatch.com/story/ceo-bill-mcnabb-reveals-probably-the-thing-we-worry-most-about-at-vanguard-2017-11-16)--Victor Reklaitis and Ryan Vlastelica contributed to this article.

(END) Dow Jones Newswires

November 16, 2017 15:01 ET (20:01 GMT)