Investing.com – Wall Street closed higher on Thursday led by energy and financials amid investor expectations the two sectors would thrive in a lower corporate tax environment.
The Dow Jones Industrial Average closed lower at 24782.29. The S&P 500 closed 0.20% higher, while the Nasdaq Composite closed at 6965.36, up 0.06%.
Tax reform optimism swept through markets lifting financials and energy as investors piled into the two sectors on expectations that lower corporate taxes would ramp up share buy backs and capital expenditures.
Reports suggest President Donald Trump may delay signing the tax bill, which proposed a cut in corporate taxes to 21% from 35%, as doing so would activate the (PAYGO) Pay as You Go provision, triggering a $25 billion cut to Medicare to offset the new debt burden stemming from the proposed tax cuts.
On the economic data front, however, investors had to contend with a mixed bag of data showing manufacturing remained firm but overall economic growth in the third quarter fell short of economists’ forecast.
The Commerce Department said third quarter gross domestic product (GDP) expanded at a 3.2% annual rate. That missed economists’ forecasts of a 3.3% rise but was above the 3.1% growth in the second quarter and the quickest rise since the first quarter of 2015.
The Philadelphia Fed said Thursday its manufacturing index rose to a reading of 26.2 in December, from 22.7 in the previous month.
On the corporate earnings front, Nike climbed in after-hours trade after posting earnings and revenue that beat on both the top and bottom line.
'Bulls and Bears' on Wall Street
The top Dow gainers for the session: Chevron Corporation (NYSE:CVX) up 3.3%, Goldman Sachs (NYSE:GS) up 2.3% and Nike Inc (NYSE:NKE) up 1.9%
Intel Corporation (NASDAQ:INTC) down 1.7%, Coca-Cola Company (NYSE:KO) down 1%, and Boeing Co (NYSE:BA) down 1%, were among the worst Dow performers of the session.