Stocks held higher on Wednesday afternoon, Aug. 30, as President Donald Trump pushed for tax reform and promised that economic growth could exceed 3%.
The Dow Jones Industrial Average was up 0.18% after fluctuating around the flatline for much of the morning. The S&P 500 gained 0.54%, and the Nasdaq added 1.1%. The S&P 500 was on track for its fourth day of gains in a row, the Dow its second, and the Nasdaq its third.
In a speech in Missouri Wednesday afternoon, Trump said he wanted to reduce the "crushing" tax burden by "fundamentally [reforming]" a confusing tax code. He called on both Democrats and Republicans to work on tax reform. Trump also said that the U.S. economy could exceed 3% growth.
National Economic Council Director Gary Cohn said earlier this month that the White House had developed a "skeleton" and that the Ways and Means Committee would need to flesh out the details.
Technology stocks were among the best performers on Wednesday, led by Analog Devices Inc. (ADI - Get Report) which spiked more than 3% after a positive quarter of earnings. Other chipmakers on the move higher included Microchip Technology Inc. (MCHP - Get Report) , Qorvo Inc. (QRVO - Get Report) and Advanced Micro Devices Inc. (AMD - Get Report) . Apple Inc. (AAPL - Get Report) hit an all-time intraday higher earlier in the session. The Technology Select Sector SPDR ETF (XLK - Get Report) added 0.3%.
Crude oil prices returned to the red Wednesday afternoon. U.S. crude stockpiles fell by 5.4 million barrels in the past week, more than double a consensus of a 1.9 million-barrel drop. The Energy Information Administration reported a decline of 3.3 million barrels in the previous week. Gasoline stockpiles were unchanged, while distillates added 700,000 barrels.
West Texas Intermediate crude was down 1% to $45.96 a barrel on Wednesday.
Commodities prices have been on watch in recent days as flooding in Texas interrupted a number of refineries and taken a large chunk of the U.S. refining capacity offline. Gasoline futures prices in the U.S. have risen more than 10% over the past two days to a two-year high as investors counted the cost of Tropical Storm Harvey's devastation, which has taken out the equivalent of more than 3.6 million barrels of refining potential in the Gulf of Mexico region.
Key distribution pipelines that take gas and distillate products to markets around the United States also have been hit, although most are still operating under reduced capacity. Texas refines 5.5 million barrels of oil a day, the most of any state and roughly 30% of the U.S. refining capacity, while Louisiana accounts for around 18%.
"As refineries have been shut down (due to damage, the inability for workers to reach them, or the inability to get gasoline out of them) a lack of demand for oil has been created," explained Matthew Peterson, chief wealth strategist for LPL Financial. "In turn, this has increased the amount of oil in storage waiting to be refined, thereby depressing prices. On the other side, refiners' inability to produce and distribute gasoline and other refined products is weighing on supply and driving those prices higher."
The second estimate of second-quarter economic growth in the U.S. came in above expectations. Second-quarter GDP increased to 3% from a prior estimate of 2.6% growth, according to the Bureau of Economic Analysis. Analysts anticipated a smaller increase to 2.7%.
"The revised GDP growth rate likely comes as a sigh of relief for folks looking for further confirmation that the U.S. economy is moving along swiftly," said Mike Loewengart, vice president of investment strategy at E*TRADE. "With solid recent retail sales numbers and this morning's blockbuster ADP jobs numbers, growth was expected but certainly not guaranteed."
In comments to CNBC on Wednesday, billionaire investor Warren Buffett said the U.S. economy does not feel as though it is running at 3% growth. Buffett said it feels more like a 2% economy.
Buffett's Berkshire Hathaway Inc. (BRK.A - Get Report) has become the top shareholder of Bank of America Corp. (BAC - Get Report) after exercising its right to acquire 700 million shares of the bank. The purchase more than tripled Buffett's original investment made six years ago. Charlotte-based Bank of America announced the exercise of warrants that gave Berkshire the right to obtain the bank's shares for roughly $7.14 each. The action now gives Berkshire around a 6.6% stake in Bank of America. Bank of America shares were up 1.7%.
U.S. private companies added 237,000 jobs in August, according to the ADP National Employment Report. Analysts expected 185,000 jobs to have been added after a reading of 178,000 in July.
The official U.S. jobs report will be released on Friday, Sept. 1, in what is the most highly anticipated and closely scrutinized economic data point of any month. The number of jobs added to the U.S. economy is expected to slow down after July marked the fifth month over 200,000 so far this year. Economists surveyed by FactSet anticipate 172,500 jobs to have been added to nonfarm payrolls in August, slowing from a pace of 209,000 in July.
The unemployment rate is expected to hold steady at 4.3%, while hourly earnings are forecast to have climbed 0.3% month on month.
"The extremely low level of unemployment at 4.3% is keeping a lid on job growth as companies struggle to find people to hire," Bryce Doty of Sit Fixed Income Advisors told TheStreet. "A source of labor supply has been part-time workers that have been looking for full-time work. The spike in Job Openings may be indicating that this source of workers is drying up. As a result, watch for wage growth to resume an upward trend by year end even though next Friday's data is expected to show only a slight increase in average hourly earnings."
North Korea launched its latest missile test on Monday evening U.S. time, the first to fly directly over Japan since 2009. North Korea's missile landed just 1,200 kilometers (750 miles) off the Japanese island of Hokkaido. North Korean state media said Wednesday that the launch was "the first step of the military operation... in the Pacific and a meaningful prelude to containing Guam."
Japanese Prime Minister Shinzo Abe called the move an "unprecedented, grave and serious threat that seriously damages peace and security in the region." Donald Trump, in a statement from the White House on Tuesday, said, "All options are on the table" with regards to North Korea. The president in the past has threatened military action if North Korea continued to threaten the U.S. and its allies. Trump previously said the U.S. would bring "fire and fury" should North Korean and its leader Kim Jong-un continue to issue threats.
Bob Evans Farms Inc. (BOBE) rose 11% after topping fiscal first-quarter sales estimates. The restaurant chain earned 37 cents a share over its recent three-month period, in-line with estimates. Revenue surged 27.2% to $109.3 million, $7 million above estimates. Chief Executive Officer Mike Townsley said in a statement, "We continued to grow household penetration of refrigerated sides and increased market share by 250 basis points from the year ago period."
H&R Block Inc. (HRB - Get Report) fell 7% after reporting a wider quarterly loss than a year earlier. The tax-preparation firm posted a net loss of 63 cents a share over the quarter, wider than 56 cents a share a year earlier. Analysts anticipated a net loss of 62 cents a share. Revenue increased 10% to $138 million, above $129 million consensus.
Vera Bradley Inc. (VRA - Get Report) was sharply lower even after topping second-quarter expectations. Net income of 6 cents was more than half profit a year earlier. Adjusted earnings of 13 cents a share was 3 cents higher than estimated. Revenue decreased nearly 6% to $112.4 million, but came in higher than estimates of $112 million. For the third quarter, Vera Bradley anticipates per-share earnings of 13 cents to 15 cents, below consensus of 16 cents.
Updated from 11:57 a.m. ET, Aug. 30.
More of What's Trending on TheStreet: