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US markets closed higher with investors' looking ahead to major earnings

The US markets closed higher on Monday, with all three major indexes logging another round of records, as investors looked ahead to key corporate earnings reports that could set the tone for trading and determine whether the lofty levels of the equity market are justified. Wide-ranging comments from President Donald Trump on tax cuts and health-care reforms following a luncheon meeting with Senate Majority Leader Mitch McConnell did not move the market. However, both issues are critical for stocks as lower taxes are seen as crucial to supporting a continued market rally.

Meanwhile, Federal Reserve Chair Janet Yellen sketched a bright outlook for the US economy and for inflation prospects in coming months, saying the impact of the recent hurricanes will likely slow economic growth slightly but only temporarily and should be followed by a rebound by year's end. Her comments suggested that the central bank will soon resume raising interest rates to reflect the strengthening economy. Yellen acknowledged that the persistence of undesirably low inflation this year has been a surprise. But she said she expected inflation to start picking up as the effects of temporary factors, such as falling prices for consumer cell-phone service, begin to fade. Yellen said that the economy's growth, as measured by the gross domestic product, might have slowed slightly in the July-September quarter as a consequence of the hurricanes but that growth is likely rebounding in the current quarter. The Fed chair enlightened that the administration's proposed tax cuts may have boosted consumer and business confidence but so far appear to have had little effect on investment or spending decisions.

On the economy front, the New York Fed reported that its Empire State manufacturing index climbed to a three-year high of 30.2 in October from 24.4 in September. Any reading over zero indicates improving conditions. The general optimism index improved even though some of the key components actually worsened, like new orders, which fell to 18 from 24.9. Shipments did improve, however, to a reading of 27.5 from 16.2, and the number of employees rose to 15.6 from 10.6. Other indexes of note showed that delivery time fell to 3.1 from 14.6, inventories dropped to negative 7.8 from positive 6.5, and prices paid and received both declined.

The Dow Jones Industrial Average added 85.24 points or 0.37 percent to 22,956.96, the Nasdaq gained 18.21 points or 0.28 percent to 6,624.01, and the S&P 500 edged higher by 4.47 points or 0.18 percent to 2,557.64.

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