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Stock Market News For Oct 6, 2017

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The S&P 500 breached a 20 year record on Thursday after hitting record close for six days on the trot. Also, the Dow and the Nasdaq notched up all-time highs. Meanwhile, the House of Representatives passed a $4.1 trillion budget bill for 2018. This package also includes $1.1 trillion for non-entitlement spending which further includes the U.S. defense budget for 2018.

The Dow Jones Industrial Average (DJIA) closed at 22,775.39, gaining 0.5%. The S&P 500 Index (INX) increased 0.6% to close at 2,552.07. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,585.36, increasing 0.8%. A total of 5.9 billion shares were traded on Thursday, lower than the last 20-session average of 6.2 billion shares. Advancing issues outnumbered decliners on the NYSE by 1.55-to-1 ratio. On the Nasdaq, advancers outnumbered decliners by 1.63-to-1 ratio. The CBOE VIX decreased 4.1% to close at 9.24.

Benchmarks Break New Boundaries

The S&P 500 garnered 14.33 points on Thursday to mark its sixth consecutive record close — its longest run of record closes since 1997. With this, the S&P 500 registered its 43rd record for 2017. Moreover, the S&P 500 has ended in the positive for the past eight successive sessions, the longest since 2013. Of the 11 major sectors of the S&P 500, 10 ended in the green, with financials and technology leading the advancers. The Technology Select Sector SPDR ETF (XLK) and Financial Select Sector SPDR ETF (XLF) both gained 1%.

The Dow amassed almost 114 points to notch up all-time intraday and closing records. This also registered its 46th record for 2017. Such gains were made possible by a surge in shares of Goldman Sachs (GS - Free Report) and Boeing (BA - Free Report) , which gained 2.4% and 1.2%, respectively. Both the companies possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Nasdaq clinched intraday and closing records as well after advancing almost 51 points. Meanwhile, the Russell 2000 index added 4.32 points to increase 0.3% and closed at 1,512.09 — coming within a fraction of its record close.

House Passes the Budget Bill

In its first definitive move toward tax reforms, the House of Representatives passed $4.1 trillion 2018 budget legislation on Thursday. This boosted investors’ sentiment and the economists expect this to be signed into law by the year end. The Republicans voted 219 to 206 in favor of the amendment. However, a few from President Trump’s team voted against the bill along with Democrats, objecting to parts of the tax reform proposal. The Democrats, meanwhile, opposed passing of the bill, terming the move as "a vehicle for achieving partisan tax reform."

Terms of the budget bill state that around $1.1 trillion would be allocated for non-entitlement spending which would include a defense budget of $622 billion. Passing of the budget resolution is particularly important for the Republicans as this would ultimately culminate into a process known as reconciliation. This would help the members of GOP to pass the tax reform bill in the Senate with just 51 votes as majority instead of the normally followed 60-votes rule.  Moreover, the Senate Budget Committee was slated to pass a budget bill similar to the one passed by the House.

As the Republicans remain divided over the amount by which tax rates will be slashed, analysts feel that it would not be an easy task for the GOP to through such reforms. The markets, however, have gained traction since the new tax code was introduced by the Trump administration.

Economic Data

The initial claims decreased to 260,000 from 272,000 in the previous week. This also came in below the consensus estimate of 266,000. Meanwhile, the trade balance decreased to $42.4 billion and came in below the consensus estimate of a decrease to $42.9 billion. Moreover, factory orders for the month of August increased 1.2%, more than the consensus estimate of an increase of 0.9%.

Stocks That Made Headlines

Costco Q4 Earnings Top, Stock Down on Margins Woe

Costco Wholesale Corporation (COST - Free Report) ended fiscal 2017 on a positive note, with both the top and bottom line beating the Zacks Consensus Estimate for the second straight quarter. (Read More)

ExxonMobil Strengthens Foothold in Guyana With Fifth Find

Oil giant ExxonMobil Corporation (XOM - Free Report) has announced the discovery of oil deposits offshore Guyana. (Read More)

AB InBev Seals Deal to Sell African Bottling Business

Anheuser-Busch InBev SA/NV (BUD - Free Report) , alias AB InBev, has successfully concluded the transaction to sell its 54.5% equity stake  Coca-Cola Beverages Africa (Pty) Ltd (“CCBA”) to the soft-drinks giant The Coca-Cola Company (KO) for $3.15 billion. (Read More)

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