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Stocks Rebound On Tax Bill, Earnings Corporate News, Tax Bill Passage Lift Stocks -- WSJ

17 Nov 2017 7:32 am
By Michael Wursthorn and Riva Gold 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 17, 2017).
   -- U.S. stocks soar after Wal-Mart earnings, tax bill is passed in House 
   -- Consumer staples among S&P 500's biggest gainers 
   -- Europe snaps longest losing streak in a year 

Soaring Wal-Mart shares and the passage of a tax-overhaul bill in the House helped U.S. stock indexes notch their biggest gains since September.

Thursday's moves reflected what has powered much of this year's rally: improving profits and sales at American companies, plus the prospect that corporate tax cuts could boost earnings even further.

After the S&P 500 posted its steepest-one day decline since September a day earlier, investors snapped up shares across several sectors Thursday. Some of the biggest gainers: groups that have struggled this year, such as consumer-staples companies, and technology stocks, major contributors to this year's gains.

The Dow Jones Industrial Average added 187.08 points, or 0.8%, to 23458.36, while the S&P 500 rose 21.02 points, or 0.8%, to 2585.64. It was the biggest one-day percentage gains for both indexes since Sept. 11.

The Nasdaq Composite gained 87.08 points, or 1.3%, to 6793.29, its 66th record of the year and its largest percentage increase since late October.

Upbeat quarterly reports from Wal-Mart Stores and J.M. Smucker helped drive consumer-staples stocks in the S&P 500 up 1.6%.

Shares of Wal-Mart surged $9.79, or 11%, to $99.62, contributing 67 points to the Dow industrials' gain Thursday, after the company posted its strongest quarterly U.S. sales growth in nearly a decade thanks, in part, to a jump in e-commerce. It was the stock's biggest percentage increase since 2008 and its highest close ever.

"Wal-Mart basically told the markets last month they were ramping up their internet business and tweaking some things and it seemed to come through in their earnings results," said Mike O'Rourke, chief market strategist at JonesTrading. "That got consumer staples going."

Shares of J.M. Smucker added 10.14, or 9.5%, to 116.65 after the maker of Folgers, peanut butter and fruit spreads beat analysts' earnings expectations.

U.S. stock indexes hit intraday highs after House Republicans passed a bill to overhaul the U.S. tax code.

The Russell 2000 index of small-capitalization companies added 1.6%. Analysts say they have been tracking the index as a proxy for investors' expectations for a tax plan since they expect the proposal to benefit smaller, more domestically focused companies.

Earlier this week, investors had been dialing back on risk, citing falling commodity prices, concerns about stress in high-yield debt and uncertainty around prospects for a U.S. tax overhaul. Stock-market declines this year have mostly been short-lived, as investors have used setbacks to quickly buy back into the market, investors and analysts say.

"You can call me a nervous bull," said Ed Keon, a managing director and portfolio manager with QMA. Stocks look pricey, he said, but added that the firm has no plans to reduce its exposure.

The Stoxx Europe 600 rose 0.8% after seven straight sessions of losses -- its longest losing streak in a year. Hong Kong's Hang Seng Index added 0.6%, lifted by a rise in technology heavyweight Tencent, which reported a nearly 70% jump in third-quarter net profit. Japan's Nikkei Stock Average added 1.5%.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

November 17, 2017 02:32 ET (07:32 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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