Wall St climbs on rising tax-cut hopes; Nasdaq breaks above 7,000

By April Joyner

NEW YORK (Reuters) - U.S. stocks traded at record highs on Monday afternoon as the Republican tax plan, which is set to cut corporate tax rates, moved closer to passage.

Earlier in the session, the Nasdaq surpassed the 7,000-point mark, while the S&P and the Dow reached record levels.

More Republicans said on Sunday they expected Congress to pass the tax bill this week, with a Senate vote set for Tuesday and President Donald Trump expected to sign the bill into law by the end of the week.

"This Congress has shown an inability to pass anything over the past five years," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. "If a major piece of legislation is passed, you'd expect the markets to be happy."

 

U.S. stocks have enjoyed a near year-long rally, with the benchmark S&P 500 <.SPX> and the blue-chip Dow Jones Industrial Average <.DJI> set for their best year since 2013.

The bill proposes to cut corporate tax rates to 21 percent from 35 percent, which investors are betting will boost profits as well as trigger share buybacks and higher dividend payouts.

Another expected outcome of lower taxes is cash repatriation, which market analysts say could boost mergers and acquisitions.

The Dow Jones Industrial Average <.DJI> rose 138.24 points, or 0.56 percent, to 24,789.98, the S&P 500 <.SPX> gained 15.96 points, or 0.60 percent, to 2,691.77 and the Nasdaq Composite <.IXIC> added 58.27 points, or 0.84 percent, to 6,994.85.

Besides the three indexes, the Nasdaq 100 <.NDX> and the S&P 100 <.OEXA> also hit record intraday highs.

The materials index <.SPLRCM> gained 1.4 percent, the most among the major 11 S&P sectors. The utilities index <.SPLRCU> was the lone decliner, with a drop of 0.9 percent.

On Monday, investors were treated to a flood of deals.

Shares of Amplify Snack soared above 70 percent to $12 after Hershey said it would buy the SkinnyPop popcorn maker in a $1.6 billion deal. Hershey rose 0.3 percent.

Snyder's-Lance was up 7.2 percent after Campbell Soup said it would buy the Pretzels and Cape Cod chips maker for $4.87 billion.

Casino operator Penn National Gaming said it would buy Pinnacle Entertainment in a $2.8 billion deal. Penn National dipped 3.3 percent, while Pinnacle's shares were up 1.2 percent.

Twitter jumped more than 10 percent after JPMorgan said it expects the company to post double-digit daily average user growth of 10 percent in 2018.

Advancing issues outnumbered declining ones on the NYSE by a 2.47-to-1 ratio; on Nasdaq, a 2.09-to-1 ratio favoured advancers.

(Additional reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur and Chizu Nomiyama)