While you were sleeping: Dow rallies 196pts on renewed hope of US tax reform

Wall Street climbed amid reports that the Trump administration is making headway on a tax reform plan.

President Donald Trump's top aides and congressional leaders have made significant strides in shaping a tax overhaul; there is broad consensus, Politico reported, citing five sources familiar with the behind-the-scenes talks, on some of the best ways to pay for cutting both the individual and corporate tax rates.

At the close of trading in New York, the Dow Jones Industrial Average rallied 196.14 points, or 0.9%, to 21,899.89. The Nasdaq Composite Index climbed 1.4% to 6297.48 and the Standard & Poor's 500 Index advanced 1.0% to 2452.51.

Investors are also gearing up for the annual meeting of global central bankers in Jackson Hole, Wyoming. Speeches from Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi, both scheduled for Friday, will be scrutinised for any fresh clues about interest rates and balance sheet adjustments.

"No one has a lot of interest in being negative in the market right here, knowing that there's this whatever-it-takes backdrop where central bankers globally just have zero interest in seeing financial conditions tighten too much," Dennis DeBusschere, head of portfolio strategy at Evercore ISI, told Bloomberg.

Wall Street's fear gauge – the CBOE Volatility Index or the VIX – dropped 12.6% to 11.53. US Treasuries declined, sending the yield on the 10-year note three basis points higher to 2.21%.

The Dow rose, led by gains in shares of Cisco and those of Caterpillar, both up 1.9% recently. Bucking the trend were shares of Intel, down 0.8% for the largest percentage decline in the Dow.

Macy's rose 4.6% after the department store chain said it appointed Hal Lawton, most recently senior vice president at eBay North America, as president. It also announced a restructuring of its merchandising operations that will include the loss of 100 jobs.

"Hal Lawton has deep expertise at the intersection of retail and technology, a diverse set of business experiences that give him a unique perspective, and a track record of successfully driving a change agenda at scale," Macy's CEO Jeff Gennette said in a statement.

"This is a key step as we look to further transform the business and work through the volatility of today's retail landscape.

"Macy's already has one of the strongest omnichannel businesses in the industry, and with Hal on the team, we will accelerate the integration of digital both online and in our stores to deliver the world-class experience our customers demand."

In Europe, the Stoxx 600 Index ended the session with a 0.8% increase from the previous close. The UK's FTSE 100 Index rose 0.9%, while France's CAC 40 Index also gained 0.9% and Germany's DAX Index advanced 1.4%.

(BusinessDesk)