Wall Street gains after Mnuchin's remarks on tax reform

By Sinead Carew

NEW YORK (Reuters) - U.S. stocks were higher in late afternoon trading on Thursday as investors took cautious hope from Washington's latest promises for long-awaited details of a tax reform plan.

U.S. Treasury Secretary Steven Mnuchin said on Thursday that President Donald Trump's administration has a detailed plan on tax reform and is on track to implement it by year-end. On Wednesday Trump reiterated his call for a U.S. corporate tax rate cut to 15 percent from 35 percent.

In the last trading day of the month, investors were focussed on recent strength in indicators such as gross domestic product as well as the outlook from Mnuchin, according to Quincy Krosby, chief market strategist at Prudential Financial in Newark, NJ.

"Even if investors aren't taking him at his word they expect him to do all he can. This is a market that has heard tax reform so often. It wants to see if they can deliver," said Krosby.

Gains were limited, however, as investors awaited the monthly jobs report on Friday to gauge the strength of the labour market and look for clues on the Federal Reserve's next move on interest rates.

Data released on Thursday showed the core personal consumption expenditures price index, the Fed's preferred inflation measure, posted its smallest year-on-year increase since December 2015 at 1.4 percent in the 12 months through July.

"The fact that inflation remains below the Fed's 2 percent goal makes it tougher for (the Fed) to raise rates in the fourth quarter," said Michael Sheldon, chief investment officer of RDM Financial Group at HighTower.

At 2:54 PM (1854 GMT), the Dow Jones Industrial Average was up 67.74 points, or 0.31 percent, to 21,960.17, the S&P 500 had gained 14.64 points, or 0.60 percent, to 2,472.23 and the Nasdaq Composite had added 58.21 points, or 0.91 percent, to 6,426.52.

Ten of the 11 major S&P sectors were higher, with the health index's <.SPXHC> 1.5 percent rise leading the advancers.

UnitedHealth's 1.2 percent gain provided the biggest boost to the Dow. The Nasdaq biotech index <.NBI> rose 2.6 percent, helped by gains in Gilead , Celgene and Biogen .

Dollar General fell 5.5 percent after reporting a slide in second-quarter margins.

Campbell Soup slid 7 percent, becoming the biggest percentage loser on the S&P, after the company warned that sales for fiscal 2018 could fall.

Advancing issues outnumbered declining ones on the NYSE by a 2.79-to-1 ratio; on Nasdaq, a 2.60-to-1 ratio favoured advancers.

(Additional reporting by Sruthi Shankar and Tanya Agrawal in Bengaluru; Editing by Saumyadeb Chakrabarty and James Dalgleish)