Coverage: Stock market closes at all-time highs

U.S. stocks rose to all-time highs on Tuesday as financials received a boost from rising yields and perceives comments from Treasury Secretary Steven Mnuchin on tax reform as positive.

Fred Imbert of CNBC.com had the news:

The S&P 500 gained 0.3 percent, notching intraday and closing records. The index closed the session at 2,496.48.

The Dow Jones industrial average finished at 22,118.86, eking out a record close. Goldman Sachs contributed the most to the gains, while DowDuPont was among the best-performing stocks in the index, closing 2.5 percent higher.

The Nasdaq composite closed 0.3 percent higher at 6,454.28, a record closing high, after briefly falling.

“The fear trade of North Korea possibly exploding another hydrogen bomb is unwinding and the damage from Hurricane Irma doesn’t seem to be as bad as thought,” said Robert Pavlik, chief market strategist at Boston Private. “That’s pushing out the weaker hands out of the bond market.”

Dave Shellock of The Financial Times reported that Treasury yields rebounded:

The yield on the 10-year US Treasury, meanwhile, was up 4 basis points at a two-week high of 2.17 per cent, after falling as low as 2.016 per cent on Friday. The two-year US yield was 2bp higher at 1.34 per cent.

The rebound in yields over the past two days has helped support the dollar as it rallied off a 10-month low against the yen of ¥107.31 to stand at ¥110.18, up 0.7 per cent on the day.

“Last week’s collapse in bond yields increasingly seems like a cathartic cleansing of positions,” said Kit Juckes, strategist at Société Générale. “If the dollar can’t stage a short-covering bounce now, when will it?”

But FX strategists at Morgan Stanley sounded a note of caution regarding the dollar’s latest rally.

Mark DeCambre and Barbara Kollmeyer of MarketWatch.com reported that it was the first time all three had closed at a record high since July:

Market participants also are looking for further signs that fiscal-stimulus measures promised by President Donald Trump during his presidential campaign may still have a chance of coming to fruition on the heels of an interview with Treasury Secretary Steven Mnuchin on CNBC Tuesday morning at an investment conference in New York.

Mnuchin said he hopes Republicans can get a tax overhaul through Congress by the end of the year, and offered that the administration was considering backdating tax reform to the start of 2017.

“Tax reform retroactive to January of 2017 is very positive if that were to happen,” said Peter Cardillo, chief market economist at First Standard Financial. “That would obviously give a boost to economic activity and corporate growth ahead,” he said.

Tuesday’s moves come after the S&P 500 and the Dow industrials logged their biggest one-day percentage gains in months on diminished anxieties about hurricanes, notably Hurricane Irma which hit Florida over the weekend, and tensions in the Korean Peninsula.