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Dow and S&P finish higher on the week for sixth time in a row after Senate approves budget blueprint

Last updated: 17:25 20 Oct 2017 EDT, First published: 08:27 20 Oct 2017 EDT

Rising market
  • Major indexes hit new highs (again)

  • Senate approves its version of the Fiscal Year 2018 Budget Resolution

  • PayPal powers higher after another earnings beat

  • Investors cash out of NCR

Stocks ended the week on an exultant note, with the key indexes hitting new highs.

The Dow Jones industrial average soared 166 points to 23,329; the S&P 500 jumped 13 to 2,575; and the Nasdaq Composite advanced 24 points to 6,629.

It was the sixth week in a row that the Dow and S&P had finished higher, while the Nasdaq Composite logged its fourth “up” week in a row.

Banks stocks went well after the Senate narrowly voted in favour of a blueprint for the fiscal budget.

Mid-session

The Dow Jones was sitting on a triple-digit gain at the end of the lunchtime trading session, as legislators made progress on budget plans.

The Dow Jones average was up 123 at 23,286 while the S&P 500 racked up a double-digit gain, up 10 at 2,572.

New highs were the order of the day after the Senate passed a budget blueprint for the coming fiscal year.

On the corporate front, NCR Corporation (NYSE:NCR) was down 11% at US$33.04.

The cash dispensing machine maker said orders for automatic telling machines (ATMs) in the third quarter were disappointing, resulting in the company reducing full-year guidance.

Online payments processor PayPal Holdings Inc (NASDAQ:PYPL) was slightly off the top but still up 4.4% on the day at US$70.18 after results released after the bell yesterday beat the market's expectations.

Broker Wedbush maintained its “outperform” rating after what it called “another 'beat-and-raise' quarter, as both of PayPal's (consumer and merchant-facing) segments continue to exceed expectations”.

Wedbush has a price target of US$78.

Open

Having put in a late rally yesterday, the main benchmarks picked up this morning where they left off after the Senate passed a budget blueprint.

The Dow Jones Average was up 69 at 23,232 and the S&P 500 was up 9 at 2,571, while even the Nasdaq Composite, the only index of the big three to retreat yesterday, was up 32 at 6,637.

The Senate's approval of its version of the Fiscal Year 2018 Budget Resolution is “a necessary step in the process towards debating and negotiating  tax policy,” noted German bank Berenberg.

“Chairman Kevin Brady of the House Ways and Means Committee has indicated that his Committee will quickly proceed toward a draft of the tax bill. It’s good to set time lines, but there will be plenty of details that will need to be addressed. 

 “We continue to expect enactment of tax legislation in Spring 2018, but the chance of quicker passage will increase if the House adopts the Senate’s budget resolution,” the bank added.

Top riser in the first hour of trading was Digital Ally Inc (NASDAQ:DGLY), the digital video imaging company.

The shares rose briskly to US$2.72, up 20.5%, after the company entered into an exclusive supply agreement with VIEVU, LLC, owned by The Safariland Group, to integrate Digital Ally’s patented VuLink automatic activation technology with VIEVU’s suite of body-worn cameras. 

Pre-market

Industrial holding company General Electric Company (NYSE:GE) was taking a caning in pre-market trading after missing earnings expectations by miles.

The results gave a clue why Jeff Immelt, GE's previous chief executive officer, left the company in August.

Underlying earnings per share of 29 cents in the third quarter were down 9% year-on-year and well below the 49 cents expected by the market.

The shares were down 7% at US$21.90 in pre-market trading, but that did not stop spread betters from expecting the Dow Jones average to open higher on Friday; quotes suggest the index will open at around 23,240 after closing at 23,163 last night, up 5 points.

The S&P 500 was tipped to open at around 2,568, up 6 points.

Honeywell International Inc (NYSE:HON), the technology and manufacturing company, edged higher in screen-based trading on Friday morning after third quarter earnings per share came in a penny ahead of the Street's consensus forecast of US$1.74.

Revenues of US$10,121mln were ahead of expectations of US$9,962mln.

Israeli biotechnology company Vascular Biogenics Ltd (NASDQ:VBLT) said the European Medicines Agency (EMA) has given orphan drug status to one of its drug candidates.

The EMA, Europe's counterpart to the US Food and Drug Administration, designated ofranergene obadenovec, known in-house at Vascular Biogenics as VB-111, as an “orphan medicinal product” for the treatment of ovarian cancer.

The designation means the drug will be fast-tracked through the regulatory process.  

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