NEW YORK, Dec. 2 (Xinhua) -- U.S. stocks have fluctuated for the week, as investors mainly focused on a political uncertainty and awaited a Senate vote on tax reform.
On Friday, Wall Street was hit by a report showing former U.S. National Security Adviser Michael Flynn pleaded guilty to lying to the Federal Bureau of Investigation regarding his improper contacts with Russia.
"My guilty plea and agreement to cooperate with the special counsel's office reflect a decision I made in the best interests of my family and of our country. I will accept full responsibility for my actions," Flynn told a court in Washington D.C.
Analysts said uncertainty has weighed on the financial markets. All three major indices fell sharply after the news, with the Dow Jones Industrial Average dropping over 300 points around midday.
Gold and U.S. Treasuries rallied following the news as Wall Street fled to safe haven assets immediately.
Meanwhile, investors also awaited a Senate vote on tax reform. Stocks pared their losses on Friday after Senator Mitch McConnell said that they had the votes to pass the Senate tax bill.
The U.S. Senate Budget Committee on Tuesday approved the Republican tax bill to overhaul the U.S. tax code, sending it to the Senate floor for a vote.
Republicans previously hoped they could pass a plan by late Thursday or early Friday, but were forced to delay voting after a setback.
U.S. equities have posted solid gains and notched record highs several times since the Election Day, partially boosted by expectations of lower corporate taxes.
The Dow Jones Industrial Average broke above the 24,000 mark on Thursday, as investors had high expectations that Republicans were on the verge of the biggest tax code overhaul in about three decades.
"We remain positive on U.S. equities given the strength of corporate earnings, progress on corporate tax reform, and a broadly supportive international economic climate," Humberto Garcia, head of global asset allocation for Bank Leumi USA, told Xinhua.
The blue-chip Dow has crossed five similar 1,000-points so far this year, as experts pointed out the robust domestic economy also boosted investor confidence.
U.S. real gross domestic product (GDP) increased at an annual rate of 3.3 percent in the third quarter of 2017, according to the "second" estimate released by the Commerce Department Wednesday. The figure was higher than the market expectation of 3.2 percent.
U.S. personal income increased 65.1 billion U.S. dollars, or 0.4 percent, in October, the Commerce Department said Thursday.
In October, disposable personal income increased 66.1 billion dollars, or 0.5 percent, and personal consumption expenditures increased 34.4 billion dollars, or 0.3 percent.
The strong economic growth is likely to bolster market expectations for another rate hike by the Fed in December.
Expectations for a December rate hike are 92.8 percent, according to the CME Group's FedWatch tool.
U.S. Federal Reserve Chair Janet Yellen said on Wednesday it is appropriate for the central bank to continue gradual interest rate hikes on the expectation that the economy and job market would remain strong.
"We continue to expect that gradual increases in the federal funds rate will be appropriate to sustain a healthy labor market and stabilize inflation around the FOMC's (Federal Open Market Committee) two percent objective," said Yellen in remarks before the U.S. Congress Joint Economic Committee.
Garcia said that all signals show that Jerome Powell, President Donald Trump's pick to lead the Federal Reserve, intends to keep to the slow moving, a supportive stance that the Fed has held in recent years.
In his confirmation hearing at the Senate Banking Committee on Tuesday, Powell indicated that he would continue the gradual monetary policy normalization strategy laid out by current Fed Chair Yellen.
"I think now the economy is strong, unemployment is low, growth is strong - in fact, it appears to have picked up - so it is time for us to be normalizing interest rates and the size of the balance sheet," he told lawmakers at the hearing.
