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Close Update: Dow, S&P 500 Close At Record Highs As Fed Set To Deliver Last Hike of 2017

A generic image of a newspaper with Stock Market as the headline. Credit: Shutterstock photo

The Dow Jones Industrial Average and S&P 500 closed at record highs on Tuesday but off their session highs after conflicting remarks about the tax reform package spooked Wall Street. Selling pressure on semiconductor stocks drove the Nasdaq to a loss for the first time in five days, while gains in financial and telecom stocks underpinned the Dow and S&P.

Republican Senator John Cornyn ignited a triple-digit rally in the Dow midday on remarks suggesting a "tentative tax bill today", adding to earlier gains as investors' risk tolerance remained intact despite expectations for the Federal Open Market Committee to raise interest rates on Wednesday.

The rally was compromised, however, by a series of tweets from Senator Rand Paul concerning the detrimental impact on the deficit by tax cuts. Paul backpedaled on remarks suggesting he wouldn't vote for the bill, but the damage was already done as the market averages pulled away from the session highs.

Inflation data gave the Fed additional ammunition to raise interest rates another 25 basis points on Wednesday and raise their growth and inflation forecasts for 2018. Producer prices increased 0.4% in November, exceeding Wall Street expectations by 0.01%. Excluding prices for food and fuel, the producer price index was up 0.3% last month, also slightly above expectations.

The Fed will announce its policy directive and economic forecasts at 2 pm ET Wednesday, preceded by the November consumer price index, expected to increase 0.4% for the nominal and 0.2% for the core.

Here's where the markets stood at the close:

US MARKETS

Dow Jones Industrial Index was up 118.77 points (+0.49%)

S&P 500 was up 4.12 points (+0.15%)

Nasdaq Composite Index was down 12.76 points (-0.19%)

GLOBAL SENTIMENT

FTSE 100 was up 0.63%

Nikkei 225 was down 0.32%

Hang Seng Index was down 0.59%

Shanghai China Composite Index was down 1.24%

UPSIDE MOVERS

(+) PTI (+161.28%) Reported positive results across all three cystic fibrosis pipeline programs

(+) TIK (+50.00%) Received $1 million in new orders

(+) GLYC (+14.87%) Reported positive results from phase 1/2 trial of GMI-1271

(+) BSQR (+13.33%) Disclosed partnership with Amazon ( AMZN ) and Microsoft ( MSFT ) for Internet of Things data visualization

DOWNSIDE MOVERS

(-) PPHM (-18.69%) Will wind down R&D investments

(-) OAS (-17.16%) Reported 32 million common share offering, acquired Delaware Basin for $946 million

(-) PGLC (-8.17%) Announced 2.43 million share offering

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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