The Dow Jones Industrial Average crossed the 24,000-point waterline on Thursday, soaring to a new record high as the GOP tax bill continued to march forward.
The Dow surged 331 points to 24,272. The S&P 500 rose 21 points to 2,647. The Nasdaq Composite gained 49 points to 6,873.
The rally gained steam amid investor optimism that tax reform will soon be enacted. Senate Majority Leader Mitch McConnell (R-Ky.) on Thursday said the Senate tax bill will pass “late tonight or tomorrow,” with the endorsement of Sen. John McCain (R-Ariz.) marking a crucial hurdle. McCain was instrumental in defeating Republicans’ attempt to overturn ObamaCare.
The S&P 500 and the Russell 2000 also hit record highs on Thursday. Many believe that tax reform will add further upside to the U.S. economy. In mid-November, UBS analyst Keith Parker told FOX Business’s Stuart Varney that tax cuts are not yet baked into the market.
“If we get a 20% corporate tax rate, then companies’ earnings per share could increase by 10%," Parker said.
UBS Chairman Axel Weber told FOX Business's Maria Bartiromo that "there will most likely be very soon tax reform, and that will help corporate a lot. We expect tax rates to go down to something like 20%. That could easily mean that we will get another 10% move in the next couple of months on the equity markets."
In addition, the U.S. economy is on the upswing. Third-quarter GDP rose 3.3% in its second reading on Wednesday, better than expected. Earlier in the week, consumer confidence hit its highest level in 17 years, and new home sales rose to the highest level in a decade.
Spreading optimism on Thursday was another drop in U.S. jobless claims and more positive corporate earnings from the likes of Kroger (NYSE:KR), the second-largest general merchandise retailer behind Walmart (NYSE:WMT). Also, warehouse club Costco (NASDAQ:COST) reported a 10% jump in same-store sales for November.
The best performing Dow stocks since the index crossed 23,000 are Nike (NYSE:NKE), Walmart, Cisco (NASDAQ:CSCO), Intel (NASDAQ:INTC) and 3M (NYSE:MMM).