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.”
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 BETR.N soared above 70 percent to $12 after Hershey (HSY.N) said it would buy the SkinnyPop popcorn maker in a $1.6 billion deal. Hershey rose 0.3 percent.
Twitter (TWTR.N) 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