US stocks open mostly higher on Trump tax cut idea

NEW YORK: US stocks started Tuesday's session with further gains, boosted by news of a Russian COVID-19 vaccine and by President Donald Trump floating the idea of cutting capital gains taxes.

Lower taxes on selling investments like stocks will usually set investors cheering, but the tech-rich Nasdaq was not impressed, and continued its downward slide.

About 40 minutes into the trading day the Dow Jones Industrial Average gained about 1.0 percent to 28,066.00 and the broad-based S&P 500 rose 0.1 percent to 3,364.73, retreating from an earlier surge.

But the Nasdaq was down another 0.9 percent to 10,873.64.

Trump, who focuses on Wall Street as a gauge of his success, late Monday said he was "very seriously" considering a capital gains tax cut as a way to boost the pandemic-hit economy.

And before the open Tuesday he tweeted: "Big Stock Market Numbers!"

Markets also latch onto any good news about coronavirus, so word that Russia had registered a vaccine also provided hope on prospects for an economic recovery, even as the White House has failed to reach a deal with Democratic leaders in Congress over a new emergency aid package.

But the news from the economic data continues to be worrisome: the NFIB small business optimism index fell nearly two points in July, far below expectations, reflecting the resurgence in COVID-19 in several states.

NFIB Chief Economist William Dunkelberg noted that small business represents nearly half of US GDP and said: "There is still plenty of work to be done to get businesses back to pre-crisis numbers."

The biggest stock gains were in companies benefitting from signs of reopening: American Airlines gained 1.0 percent, Southwest Airlines jumped 2.3 percent and Norwegian Cruise Lines surged 4.3 percent.