December 14, 2017 / 2:10 PM / 4 months ago

Wall Street at record highs on rising hopes of tax overhaul

NEW YORK (Reuters) - Wall Street’s three major indexes scaled new heights on Friday, with all major sectors pushing higher as a long-awaited tax bill that would cut corporate tax rates looked like it would win support among lawmakers.

Republicans were expected to release final details of their plan on Friday, with decisive votes in the House of Representatives and the Senate seen next week.

By late afternoon CNBC was reporting that Republican Marco Rubio would support a compromise bill. Rubio had spoken out against the bill as he sought an expansion of child tax credits.

“It’s the Marco Rubio watch today and the market seems to be responding to the latest on whether he will or won’t support the tax reform bill,” said David Joy, chief market strategist at Ameriprise Financial in Boston.

“They’re not completely out of the woods yet but it’s getting closer and closer.”

The bill, which in its current form proposes to lower the corporate tax rate to 21 percent from 35 percent, has been a major catalyst for this year’s surge in equities.

At 2:34 p.m. (1934 GMT), the Dow Jones Industrial Average .DJI was up 166.05 points, or 0.68 percent, to 24,674.71, the S&P 500 .SPX had gained 26.39 points, or 1.00 percent, to 2,678.4 and the Nasdaq Composite .IXIC had added 82.72 points, or 1.21 percent, to 6,939.25.

The S&P 500 and the Dow were on track to close higher for the fourth week in a row, while the Nasdaq was set to post its first weekly gain in three weeks.

FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, U.S., December 28, 2016. REUTERS/Andrew Kelly/File Photo

The S&P financial index .SPSY was the biggest percentage gainer of all the S&P sectors with a 1.4 percent rise. Banks are seen as one of the biggest beneficiaries of tax reform.

The S&P consumer staples index .SPLRCS rose 1.2 percent. Costco (COST.O) was its biggest percentage gainer with a 3.7 percent rise after the retailer reported upbeat results.

On top of a boost expected from the tax law overhaul, Ameriprise’s Joy said investors may have been encouraged by Unilever’s (ULVR.L) agreement to sell its margarine and spreads business to U.S. private equity firm KKR (KKR.N) for 6.83 billion euros ($8.04 billion).

The technology sector also gained, though one notable decliner was Oracle (ORCL.N). The software maker slipped 4.4 percent after it gave a disappointing forecast for its cloud business.

CSX (CSX.O) tumbled 7.4 percent after the railroad said its Chief Executive Hunter Harrison was taking medical leave, amid its controversial turnaround plan.

Stocks trading volume was expected to be higher than normal on Friday due to “quadruple witching,” the simultaneous expiration of U.S. options and futures contracts.

    Advancing issues outnumbered declining ones on the NYSE by a 2.86-to-1 ratio; on Nasdaq, a 2.87-to-1 ratio favoured advancers.

    The S&P 500 posted 31 new 52-week highs and one new low; the Nasdaq Composite recorded 65 new highs and 41 new lows.

    Additional reporting by Rama Venkat Raman and Sruthi Shankar in Bengaluru; Editing by Savio D'Souza and James Dalgleish

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