Wall Street ends day with substantial gains on improved sentiment

Fueled by the improving market sentiment on Thursday, major equity indexes in the U.S., which closed five straight days with losses before today, staged a strong recovery.

The U.S. House of Representatives voted 227 vs. 205 in favor of passing the tax bill over to the Senate. Commenting on this development, “the tax plan isn’t a foregone conclusion but it passed the lowest hurdle in the House. The reconciliation will be the real measure, if it happens,” Brian Battle, director of trading at Performance Trust Capital Partners in Chicago, told Reuters. Nonetheless, the CBOE Volatility Index, a broadly accepted measure of market anxiety, fell for the first time in a week, pointing to an increased risk appetite.

In the meantime, Wal-Mart shares gained more than 10% and advanced to its record high near $100 after the retail giant announced its best revenue growth figures in 8 years amid robust expansion in online sales.strongest U.S. revenue growth since 2009 and soaring online sales. The S&P 500 Consumer Staples Sector (SPLRCS) added 1.5% to become the best performing sector of the day.

Taking advantage of the improved market sentiment, the risk-sensitive S&P 500 Information Technology Sector (SPLRCT) rose 1.3%. 

The Dow Jones Industrial Average added 187.21 points, or 0.8%, to 23,458.49, the S&P 500 rose 21.06 points, or 0.82%, to 2,585.68 and the Nasdaq Composite gained 86.66 points, or 1.29%, to 6,792.86.

DJIA technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, writes, ""he Dow's daily chart shows that the recovery stalled around a flat 20 SMA, but also that technical indicators turned higher and re-entered positive territory, after briefly piercing their mid-lines earlier this week. Shorter term and according to the 4 hours chart, the risk turned towards the upside, as the index recovered above all of its moving averages, while the Momentum maintains its bullish slope at daily highs as the RSI turns flat around 56. The index topped for the day at 23,489, the immediate resistance now, with gains beyond the level favoring a continued advance for this Friday."

Headlines from the NA session

• Market wrap: Risk appetite was more positive - Westpac
• Fed's Mester: Inflation likely to hit two percent target by end of 2018
• Dollar Index approaches daily highs after US House vote on tax cuts
• US House passes sweeping tax legislation, sending measure to Senate - Reuters
• Fed's Kaplan: There's no question cyclical pressures on inflation are building
• Fed's Kaplan: If unemployment rate rises, that could be sign of a coming recession
• US: Homebuilder confidence extends gains in November - Wells Fargo
• Market is underestimating the extent of next year's Fed tightening? - Scotiabank
• Crude oil prices holding at the lower end of their weekly ranges
• US Industrial Production: Noisy data masks underlying improvement - Wells Fargo