While you were sleeping: Wall Street rebounds as financial, energy shares gain

Wall Street rebounded from the previous session's loss, bolstered by gains in bank and energy stocks on optimism corporate tax cuts would lift profits and underpin economic growth.

A Commerce Department report showed US gross domestic product expanded at a 3.2% annualised pace in the third quarter. While the third GDP estimate was revised down from the 3.3% reported last month, it remains the fastest pace since early 2015.

"You've got an improving economy that bodes well for loan growth along with a rising interest rate environment, and a modest regulatory relief, which makes financial stocks favourable," Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis, told Reuters.

In the final hour of trading in New York, the Dow Jones Industrial Average was up 84 points, or 0.3%, to 2689. The Nasdaq Composite Index is up 0.2% to 6974 and the Standard & Poor's 500 Index has risen 0.4% to 2688.

The US dollar gained, as did Treasuries, pushing yields on the 10-year note 1 basis point lower to 2.481% from 2.497% on Wednesday.

Investors are also digesting the impact of the new tax overhaul bill, which was passed by the Congress on Wednesday.

"The impact is still a work-in-progress, tax cuts are believed to add to earnings," Sandven told Reuters. "But the unknowns are to what extent the company behaviour changes in terms of capex policy, buybacks and wage increases."

Chevron, Goldman lead rally
The Dow rose as advances in shares of Chevron and those of Goldman Sachs, recently up 3.9% and 2.4% respectively, outweighed declines in shares of Intel and those of Coca-Cola, down 1.5% and 0.7% respectively.

Bucking the trend, shares of Bed Bath & Beyond sank 12.8% amid concern about the company's holiday sales. Chief Financial Officer Susan Lattmann said that heavy promotions may have spurred holiday spending in November-at the expense of December sales, according to Bloomberg.

The comment suggests "business may have slowed a bit in December," Jefferies analyst Daniel Binder said in a note to clients, Bloomberg reported. "Management is taking actions to improve sales and profitability, but it remains unclear when/how much these initiatives will begin to bear fruit."

In Europe, the Stoxx 600 Index rose 0.6%. The UK's FTSE 100 Index rallied 1.1%, France's CAC 40 Index advanced 0.6% and Germany's DAX Index gained 0.3%.

Shares of Nestlé closed 1% stronger in Zurich. The world's largest packaged food company said it expected to sell its US confectionery business in the first quarter of 2018, according to media reports.

"Our strategic review has led to us deciding to divest the business and a robust sale process is currently under way which we expect to conclude in Q1 2018," a spokeswoman said on Thursday, according to Reuters.

Analysts have estimated the unit could fetch between $US1 billion and $US3 billion, according to Bloomberg.

(BusinessDesk)