Investors are exuberant and for good reason: The global economy is strong, corporate earnings are solid, Washington appears closer to delivering lower taxes on corporations and is signaling less restrictive oversight of the financial sector.
Thanks to that enthusiasm, Wall Street finished November with a broad rally that gave the Dow Jones industrial average its biggest gain since March and pushed it past the 24,000 mark for the first time.
Other market indicators also reached milestones on Thursday. The Standard & Poor’s 500 index, which is widely followed by professional investors, had its biggest monthly gain since February.
Technology stocks, the biggest driver of the market’s increase this year, were responsible for much of the gain, rebounding from a sharp pullback the day before. Financial stocks slowed a bit, but remain in the midst of a weeklong rally sparked by rising interest rates and encouraging words from regulators.
Investors were encouraged by the latest batch of economic data pointing to a pickup in global and domestic demand. But the run-up in the market really kicked in after developments in Washington gave traders fresh optimism that the Republican-led effort to forge a sweeping tax cut bill will succeed.
“A parade of data have surprised to the upside and that’s helped underpin the market’s tone,” said Quincy Krosby, chief market strategist at Prudential Financial. “But clearly the move toward tax reform, moving through the hurdles, has the market poised for a tax reform package to be legislated either at the end of this year or early next year.”
The S&P 500 index climbed 0.8 percent, to 2,647.58. The Dow jumped 331.67 points, or 1.4 percent, to 24,272.35. The average was briefly up more than 387 points. The Nasdaq added 0.7 percent, to 6,873.97.
Stocks are being driven higher by a healthy economic backdrop and by the prospect that policy changes will fatten corporate profits.
The Commerce Department reported this week that the U.S. economy grew at a 3.3 percent annual pace from July through September, the fastest in three years. Consumer spending and incomes posted healthy gains in October, the Labor Department reported Thursday.
Surveys show American consumers, whose spending accounts for 70 percent of U.S. economic output, are in the sunniest mood since 2000, their disposition brightened by a healthy job market. The unemployment rate is at a 17-year low 4.1 percent.