By Investors Hub
Major U.S. index futures are pointing to a slightly higher opening on Monday, with stocks poised to extend the upward trend seen over the past several sessions.
Stocks moved mostly higher over the course of the trading session on Friday following the mixed performance seen in the previous session. With the upward move on the day, the major averages once again reached new record closing highs.
The major averages finished the session firmly in positive territory. The Dow advanced 165.59 points or 0.7 percent to 23,328.63, the Nasdaq rose 23.99 points or 0.4 percent to 6,629.04 and the S&P 500 climbed 13.11 points or 0.5 percent to 2,575.21.
For the week, the Dow jumped by 2 percent, while the Nasdaq and the S&P 500 increased by 0.4 percent and 0.9 percent, respectively.
The strength on Wall Street was partly in reaction to news that Senate Republicans approved a budget resolution that will serve as the legislative vehicle for their tax reform plan.
The non-binding budget resolution unlocks the reconciliation process, allowing Republicans to pass their tax reform plan with a simple 51-vote majority in the Senate.
The Senate voted 51 to 47 in favor of the measure, with the vote largely coming down along party lines. Senator Rand Paul, R-Ken., was the only Republican to vote against the resolution.
“This now allows for the passage of large scale Tax Cuts (and Reform), which will be the biggest in the history of our country!” President Donald Trump said in a post on Twitter.
The GOP’s tax reform plan includes a reduction in the corporate tax rate to 20 percent from 35 percent as well as a consolidation in personal income tax brackets to three from seven.
Positive sentiment was also generated by a report from the National Association of Realtors showing an unexpected rebound in existing home sales in the month of September.
NAR said existing home sales climbed by 0.7 percent to an annual rate of 5.39 million in September from a rate of 5.35 million in August. Economists had expected existing home sales to drop to a rate of 5.30 million.
Among individual stocks, shares of General Electric (GE) turned higher over the course of the session even though the industrial conglomerate reported third quarter earnings well below analyst estimates and slashed its full-year earnings forecast.
The rebound by GE came after new Chief Executive John Flannery vowed to sell or spin off $20 billion worth of assets as part of “sweeping change” at the company.
Digital payments company PayPal (PYPL) posted a standout gain after the company reported third quarter results that exceeded analyst estimates on both the top and bottom lines.
On the other hand, shares of Procter & Gamble (PG) came under pressure after the consumer products giant reported better than expected fiscal first quarter earnings but on sales that came in slightly below estimates.
Banking stocks showed a strong move to the upside on the day amid optimism about tax reform, with the Dow Jones Banks Index climbing by 1.6 percent. With the gain, the index reached its best closing level in well over nine years.
First Republic Bank (FRC), People’s United Financial (PBCT), and Capital One (COF) turned in some of the banking sector’s best performances.
Significant strength was also visible among trucking stocks, as reflected by the 1.2 percent gain posted by the Dow Jones Trucking Index. The index climbed to a new record closing high.
Railroad, software, and networking stocks also saw notable strength on the day, while biotechnology stocks moved to the downside.
Within the biotech sector, Celgene (CELG) posted a steep loss after the biopharmaceutical company discontinued two studies of its drug to treat Crohn’s disease and said it would not begin a third.
