Solid gains for the Nasdaq put it on the path to its best daily performance in more than a month on Wednesday, Sept. 27, largely thanks to a rallying tech sector.
The Nasdaq gained 1.2%, its best one-day performance since Aug. 14. The S&P 500 rose 0.46%. The Dow Jones Industrial Average was up 0.29%, the worst performer among benchmark indexes.
The tech sector was a big gainer on Wednesday, rebounding from steep losses earlier in the week. Nvidia Corp. (NVDA) - Get Report , Amazon.com Inc. (AMZN) - Get Report , Alphabet Inc. (GOOGL) - Get Report , Facebook Inc. (FB) - Get Report and Alibaba Group Holding Ltd. (BABA) - Get Report were higher. The Technology Select Sector SPDR ETF (XLK) - Get Report increased 1.1%.
Shares of Micron Technology Inc. (MU) - Get Report helped the tech sector along after the chipmaker reported better-than-expected fiscal fourth-quarter earnings and its outlook for the fiscal first quarter topped expectations. Micron estimated first-quarter revenue of $6.1 billion to $6.5 billion, higher than expectations of $6 billion. The company said earnings should come in at $2.09 and $2.23 a share, above forecasts of $1.82.
Tax reform talk kept the banking sector in good spirits. In a nine-page framework document, President Donald Trump and the GOP outlined plans to reform the tax code. Among the goals, Republicans aim to downsize individual tax brackets into three from seven -- 12%, 25% and 35% -- with income thresholds to be decided. The current lowest bracket is 10%, but lawmakers argued that the increase will be countered by almost doubling the standard deduction to $12,000 for individuals and $24,000 for families.
The Big Six -- a group of officials from the White House and Capitol Hill -- also proposes reducing the corporate tax rate to 20% and a 25% tax rate for certain pass-through entities.
Trump will lay out the plan in a speech in Indiana on Wednesday afternoon. Trump had pushed for a corporate tax rate as low as 15% as late as Sunday.
The Big Six group includes Treasury Secretary Steven Mnuchin, House Speaker Paul Ryan, and Senate Majority Leader Mitch McConnell. Commerce Secretary Wilbur Ross told CNBC on Tuesday that if done right, tax reform could bump up U.S. GDP by 1%, creating "$10 trillion more GDP, $3 trillion more revenues to the federal government" over the next 10 years or so.
Financials stocks were performing particularly well after the tax plan was revealed. Wells Fargo & Co. (WFC) - Get Report , Bank of America Corp. (BAC) - Get Report , Citigroup Inc. (C) - Get Report and JPMorgan Chase & Co. (JPM) - Get Report were all higher on Wednesday. The Financial Select Sector SPDR ETF (XLF) - Get Report increased 1.5%.
A selloff in Nike Inc. (NKE) - Get Report shares kept the Dow close to the flatline. The athletic apparel and sneaker company fell 4% on Wednesday after reporting fiscal first-quarter revenue that came up short. Nike earned 57 cents a share in the quarter, higher than analysts' expectations of 48 cents. Revenue of $9.07 billion was up from last year's $9.06 billion but lower than Wall Street's estimates for $9.09 billion.
On a call with analysts, Nike CEO Mark Parker said revenue in the quarter was driven by Air Max sneakers and that new products under that collection will be released "soon." Gross margins fell 180 basis points in the first quarter due, in part, to "a higher mix of off-price sales," Nike said.
Durable goods orders in the U.S. rose in August, largely thanks to a big increase in aircraft bookings. Orders for long-lasting U.S.-made goods increased 1.7% last month, according to the Census Bureau. Economists had expected a 1.0% increase. Excluding transportation, durable goods orders increased 0.2%. Core capital goods orders rose by 0.9%.
Pending home sales in the U.S. declined in August for the fifth time in the past six months, according to the National Association of Realtors. The pending home sales index declined by 2.6% to a reading of 106.3 in August. The measure was at its lowest level of the year. Pending home sales measure the number of real estate contracts signed in which the deal has not yet been finalized.
Markets traded nervously on Tuesday, Sept. 26, as Federal Reserve Chair Janet Yellen kept markets guessing on a December interest rate hike. On the dovish side, Yellen said the Fed may have made an error in assessing the labor market and inflation trends, meaning easy monetary policy may be the right move in the near-term. But Yellen also reiterated her belief that soft inflation was "probably temporary" and that inflation would reach the Fed's 2% target in the next few years. Yellen also cautioned against moving too gradually, noting the risk that the labor market could overheat.
The chances of a 25-basis-point rate hike at the December meeting sit at 76.4%, according to CME Group fed funds futures. Another rate hike would put the federal funds rate at 1.25% to 1.5%.
Crude oil prices rose on Wednesday after a weekly reading on U.S. stockpiles showed a surprise decline in the past week. Crude inventories fell by 1.8 million barrels, according to the Energy Information Administration, far better than an expected rise of 3.4 million barrels. The drop is a sign that excess supply has begun to be filtered through refineries after Hurricane Harvey crippled operations in the Texas and Louisiana region in late August.
West Texas Intermediate crude was up 0.4% to $52.11 a barrel on Wednesday.
Hormel Foods Corp. (HRL) - Get Report dipped after a series of C-suite changes. The packaged foods company, which owns Spam and peanut butter brand Skippy, announced that Chairman Jeffrey Ettinger would retire, closing the chapter on almost 11 years in the positions. CEO Jim Snee will resume the position of chairman, effective Nov. 20. Snee has acted as CEO since October 2016.
Twitter Inc. (TWTR) - Get Report increased 2.5% after announcing a tweak to its character count. The social platform has expanded the character count available in tweets to 280 characters, double the regular 140-character count. The larger tweets are only available to a select number of users at this stage.
Updated from 1:36 p.m. ET, Wednesday, June 27.
Don't miss these top stories on TheStreet:
- Missed Nvidia's Rally? Stay Ahead of the Next Big Explosive One
- Trump Tax Plan Cuts Corporate Rate, Raises Lowest Rate, Leaves Lots Out
- Kawasaki Ninja H2R: Is it Enough to Excite Die-Hard Enthusiasts?
- Microsoft Just Made a Slew of Announcements -- Here Are the 5 Most Important
- Floyd Mayweather Got Knocked Out in Real Estate By Not Taking a Mortgage