While you were sleeping: Wall Street rallies on Wal-Mart, tax bill progress

Wall Street gained as Wal-Mart rallied after posting earnings that beat expectations. Also adding to sentiment was renewed optimism that the Trump administration is making progress on its tax reform, including corporate tax reductions.

At the close of trading in New York, the Dow Jones Industrial Average surged 187.08 points, or 0.8%, to 23,458.36. The Nasdaq Composite Index rallied 1.3% to 6793.29 and the Standard & Poor's 500 Index advanced 0.8% to 2585.64.

It was the biggest one-day gain for the Dow and the S&P 500 since September 11, boosted by the House of Representatives passing the most comprehensive tax reform bill in 31 years.

"The bull market is still intact. Good earnings and strong economic data are what stocks care about," Michael Antonelli, managing director, institutional sales trading at Robert W Baird in Milwaukee, told Reuters.

US Treasuries declined, sending yields on the 10-year note three basis points higher to 2.35%.

"It looks like [tax reform] will get done, but I think people get more emotional about it than they should," Joe 'JJ' Kinahan, chief market strategist at TD Ameritrade, told Bloomberg. "At the end of the day, earnings drive the market, earnings have overall been good."

Wal-Mart rallies 11%
The Dow gained as Wal-Mart rallied 11% to a record high after the world's largest retailer reported better-than-expected quarterly sales growth and upgraded its full-year earnings forecast, bolstering optimism about its outlook in an increasingly competitive industry pressured by Amazon.

US comparable sales rose 2.7% in the quarter from the corresponding period a year earlier, while comparable traffic grew 1.5%, Wal-Mart said in a statement. Online net sales in the US climbed 50% in the quarter from the same period a year ago.

"While we recognise that there are some incremental hurricane-related sales in these numbers, our core business is performing well," Doug McMillon, Wal-Mart Stores CEO, said according to a transcript of the company's earnings call.

"The food business, in particular, has accelerated and delivered the strongest quarterly comp sales performance in almost six years with our fresh meat, bakery and produce teams leading the way," he said.

The company upgraded its projection for its fiscal-year 2018 adjusted earnings to between $US4.38 and $US$4.46 a share, up from its previous forecast for between $US4.30 and $US4.40.

"We have momentum, and it's encouraging to see customers responding to our store and eCommerce initiatives," Mr McMillon added.

Exxon Mobil and Chevron declined as oil prices continued to fall.

In Europe, the Stoxx 600 Index rose 0.8% – the first gain in more than a week. The UK's FTSE 100 Index added 0.2%, Germany's DAX Index rose 0.6% and France's CAC 40 Index increased 0.7%.

(BusinessDesk)