US open: Stocks snap higher on tax reform optimism

Wall Street was bouncing back in early trading, goaded by reports of progress on tax reform on Capitol Hill.

At 1600 BST, the Dow Jones Industrial Average was 0.57% or 123.83 points higher to 21,829.15, alongside a 1.01% or 62.85 point advance for the Nasdaq Composite and a gain of 0.64% or 15.61 points in S&P 500.

"One day down, one day up, and so on. This is the theme of August, with markets unable so far to establish a direction and stick with it. After losses yesterday the buyers have come back in, with fresh hope of moves on US tax reform apparently providing the catalyst for gains. Warm words from Senate leader McConnell on the debt ceiling are also helping to boost confidence," said IG's chief market analyst, Chris Beauchamp.

From a sector standpoint, the best performing areas of the market were: Non-ferrous metals (4.10%), Aluminum (3.27%), Toys (2.37%) and Industrial metals (1.96%).

Defence stocks also found following a speech overnight in which President Trump committed the use to not leaving a security vacuum in Afghanistan which might benefit the Taliban. Against that backdrop, the SPDR S&P Aerospace & Defense ETF was up by 0.88% to $73.91.

Yet the spotlight on Tuesday was on US Republicans' efforts at tax reform after a source-based report from Politico pointed at progress on that legislative front.

According to Politico, which cited five sources familiar with the talks between top members of the Trump administration and several key Republican Congressmen, a broad consensus had been reached on the best way to go about cutting both the individual and corporate tax rates.

In currency markets, the spot US dollar index was up 0.4% to 93.44 with the yield on the benchmark US two basis points higher at 2.20%.

Meanwhile, oil prices were a little firmer ahead of the API weekly oil stock data at 2130 BST. West Texas Intermediate was up 0.32% to $47.68 a barrel.

In corporate news, shares of Tenet Heathcare were sharply lower following the exit of two members of its board who represented its main institutional shareholder, Glenview Capital Management.

Medtronic was also a drag after the medical equipment manufacturer posted worse than expected second quarter sales of $7.39bn.

Going the other way, discount shoe retailer DSW Inc. snapped higher after reporting its first gain in same store sales since 2015.

Dow Jones - Risers

Caterpillar Inc. (CAT) $115.39 1.58%
Apple Inc. (AAPL) $159.21 1.27%
Cisco Systems Inc. (CSCO) $31.04 1.17%
Exxon Mobil Corp. (XOM) $77.21 1.08%
Microsoft Corp. (MSFT) $72.91 1.05%
E.I. du Pont de Nemours and Co. (DD) $82.64 0.99%
Boeing Co. (BA) $237.92 0.95%
General Electric Co. (GE) $24.71 0.90%
Goldman Sachs Group Inc. (GS) $222.61 0.82%
JP Morgan Chase & Co. (JPM) $91.34 0.78%

Dow Jones - Fallers

Johnson & Johnson (JNJ) $133.10 -0.26%
Verizon Communications Inc. (VZ) $48.03 -0.23%
American Express Co. (AXP) $85.18 -0.14%
Procter & Gamble Co. (PG) $92.80 -0.06%
Coca-Cola Co. (KO) $45.67 -0.03%
United Technologies Corp. (UTX) $115.32 0.03%
3M Co. (MMM) $204.99 0.22%
Visa Inc. (V) $103.46 0.23%
McDonald's Corp. (MCD) $158.81 0.28%
Wal-Mart Stores Inc. (WMT) $79.97 0.33%

S&P 500 - Risers

Freeport-McMoRan Inc (FCX) $15.32 4.01%
Macy's Inc. (M) $20.13 3.05%
United States Steel Corp. (X) $23.97 2.79%
W.W. Grainger Inc. (GWW) $162.66 2.68%
Fastenal Co. (FAST) $41.01 2.60%
Vertex Pharmaceuticals Inc. (VRTX) $152.77 2.52%
Micron Technology Inc. (MU) $30.26 2.37%
Southwestern Energy Co. (SWN) $5.30 2.32%
Mallinckrodt Plc Ordinary Shares (MNK) $36.93 2.21%
Lowe's Companies Inc. (LOW) $75.45 2.17%

S&P 500 - Fallers

Tenet Healthcare Corp. (THC) $16.15 -2.48%
Medtronic Plc (MDT) $81.82 -2.03%
Frontier Communications Co. (FTR) $12.52 -1.57%
PulteGroup Inc. (PHM) $25.08 -1.24%
Lennar Corp. Class A (LEN) $51.54 -1.09%
D. R. Horton Inc. (DHI) $35.40 -1.06%
Endo International Plc (ENDP) $8.44 -0.94%
Johnson Controls International plc (JCI) $37.92 -0.91%
SCANA Corp. (SCG) $59.97 -0.89%
J. M. Smucker Co. (SJM) $120.77 -0.89%

Nasdaq 100 - Risers

Fastenal Co. (FAST) $41.01 2.60%
Vertex Pharmaceuticals Inc. (VRTX) $152.77 2.52%
Micron Technology Inc. (MU) $30.26 2.37%
Seagate Technology Plc (STX) $32.11 2.07%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $56.84 1.75%
Applied Materials Inc. (AMAT) $44.06 1.74%
Lam Research Corp. (LRCX) $161.09 1.70%
Marriott International - Class A (MAR) $100.75 1.69%
Electronic Arts Inc. (EA) $118.81 1.69%
Starbucks Corp. (SBUX) $54.04 1.67%

Nasdaq 100 - Fallers

Mylan Inc. (MYL) $30.19 -0.82%
Mattel Inc. (MAT) $16.29 -0.79%
Charter Communications Inc. (CHTR) $395.04 -0.36%
American Airlines Group (AAL) $45.60 -0.24%
CA Inc. (CA) $32.49 -0.20%
Twenty-First Century Fox Inc Class A (FOXA) $27.34 -0.11%
Hasbro Inc (HAS) $94.75 -0.09%
Twenty-First Century Fox Inc Class B (FOX) $26.88 -0.04%
Viacom Inc. Class B (VIAB) $28.10 -0.04%
Vodafone Group Plc ADS (VOD) $28.75 0.16%