The Dow continued to notch up gains during a week marked by key legislative developments. Initially investors were concerned over news that the House was considering a ‘gradual phasing-in’ of corporate tax rates.
However, markets received a boost after the Fed chose not to hike interest rate this month. Investor sentiment was buoyed further after House Republicans finally revealed a detailed framework of the new tax policy. Subsequently, the Dow hit its 55th record close for the year.
Last Week’s Performance
The Dow increased 0.1% last Friday. Such gains were powered a surge in the tech stocks with shares of Microsoft Corporation (MSFT – Free Report) and Intel Corporation (INTC – Free Report) contributing to most of the gains.
However, the blue-chip index pared gains due to losses for Chevron Corp. (CVX – Free Report) and Merck & Co. (MRK – Free Report) , shares of which declined 4.1% and 6.1%, respectively. Broader markets were also boosted after the third quarter GDP estimate of the U.S. economy came in above the consensus estimate.
The index increased 0.5% over last week, registering its seventh straight weekly gain. This was also the longest streak of weekly gains for the Dow since December last year. Broader markets gained as market watchers remained hopeful that the new tax code would be signed into policy soon.
Moreover, the House of Representatives cleared the budget blueprint with majority of the Republicans voting in favor of the move. Further, the ECB announced plans to extend the quantitative easing program.
The Dow This Week
The index lost 0.4% on Monday following reports from Bloomberg that the House was considering a ‘gradual phasing-in’ of corporate tax rates. This hurt investor sentiment and caused broad based losses for the markets.
Investors also eagerly awaited the announcement of the next Fed Chief, whose name President Trump is expected to reveal on Thursday. Meanwhile, markets also suffered after Paul Manafort was convicted in the Russian meddling case.
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