NEW YORK: Wall Street closed at a record high and the dollar rose on Tuesday as sentiment was buoyed by progress on US tax reform, strong economic data, and comments by the nominee for chairman of the Federal Reserve.
The British pound briefly rallied more than 1 percent from its lows after The Daily Telegraph newspaper reported that Britain and the European Union had agreed on the amount of the Brexit financial settlement, citing unidentified sources.
Sterling was last 0.31 percent higher at $1.3357.
US stocks had a volatile afternoon after news of a North Korean missile launch caused the S&P 500 to pare gains.
But indexes regained ground as investors’ focused on progress for a US tax cut bill, and all three major indexes posted record closing highs.
The US Senate budget committee voted along party lines to send a Republican tax bill for a full Senate vote.
“People are trying to move in front of what they think now is likely to be some tax reform on the corporate side,” Rick Meckler — the president of New Jersey-based LibertyView Capital Management — said.
The S&P’s biggest boost came from financial stocks after Fed chair nominee Jerome Powell, in his Senate confirmation hearing, discussed potentially lightening regulation. He also said the best way to sustain the US economic recovery would be to continue gradual interest rate increases.
The Dow Jones Industrial Average rose 255.93 points (or 1.09 percent) to 23,836.71, the S&P 500 gained 25.62 points (or 0.98 percent) to 2,627.04, and the Nasdaq Composite added 33.84 points (or 0.49 percent) to 6,912.36.
The pan-European 300 index rose 0.59 percent and MSCI’s gauge of stocks across the globe gained 0.48 percent.
The dollar index rose 0.35 percent, with the euro down 0.44 percent to $1.1844.
On top of the policy news, the dollar was helped by data that showed US consumer confidence surged to a near 17-year high in November, driven by a robust labour market, and that home prices rose sharply in September, which should underpin consumer spending and boost economic growth.
“This is partly an unwind of some of the move we saw last week, which took place in the wake of the slightly more cautious minutes from the Fed and in an especially illiquid holiday market,” Omer Esiner — the chief market analyst at Washington-based Commonwealth Foreign Exchange — said.
Esiner also cited the positive data.
US Treasury yields inched higher as risk appetite improved due to the consumer confidence data and the Senate panel vote to advance the tax bill.
Benchmark 10-year notes last rose 1/32 in price to yield 2.3259 percent, from 2.328 percent late on Monday.
The 30-year bond last rose 7/32 in price to yield 2.7554 percent, from 2.765 percent late on Monday.
Oil prices eased on uncertainty over the outcome of a meeting of the organization of the petroleum exporting countries (OPEC) this week at which an extension to OPEC’s price-supporting oil output cuts will be discussed.
US crude fell 0.74 percent to $57.68 per barrel and Brent was last at $63.28, down 0.88 percent on the day.
Spot gold dropped 0.1 percent to $1,293.74 an ounce.