Dow, S&P 500, Nasdaq close at records as US tax cut feeds rally

Dow, S&P 500, Nasdaq close at records as US tax cut feeds rally

NYSE Dec18
Traders work on the floor of the New York Stock Exchange. (Drew Angerer/Getty Images/AFP) 

NEW YORK: Wall Street stocks surged to fresh records on Monday (Dec 18), and the Nasdaq breached 7,000 points for the first time, as a long-awaited US tax cut proposal approached final passage.

The tech-rich Nasdaq Composite Index rose 58.18 points (0.84 per cent) to 6,994.76, below its session peak of 7,003.89.

The Dow Jones Industrial Average gained 140.46 points (0.57 per cent) to end at 24,792.20, while the broad-based S&P 500 advanced 14.35 points (0.54 per cent) to 2,690.16. All three indices added to the records set on Friday.

Wall Street has grown increasingly giddy this month as obstacles to the massive tax cut package have been overcome and momentum builds for a measure that is expected to be sent to President Donald Trump's desk by the end of the year. The House is expected to vote on Tuesday.

"We are seeing continued buying across the board from both institutional and individual investors," said Adam Sarhan, chief executive of 50 Park Investments.

Confidence is growing that after a multi-year stretch of slow expansion, "we are now starting to see more robust growth," Sarhan added.

"The fact that the market refuses to fall is a very bullish sign. Investor appetite for risk remains very strong."

Sectors with especially large gains included materials, financials and consumer discretionary stocks.

Chip giant Intel led the Dow with a 3.8 per cent gain, while Apple, Caterpillar and DowDuPont also outperformed.

And Warren Buffet's Berkshire Hathaway "A" shares rose 1.0 per cent after briefly pushing above US$300,000 for the first time.

Besides tax cuts, analysts said sentiment was boosted by a number of small- and medium-sized corporate deals.

The biggest involved snack company Snyder's-Lance, which gained 7.0 per cent after being acquired by Campbell Soup for US$4.9 billion. Campbell Soup rose 0.1 per cent.

Freight rail company CSX rose 1.3 per cent after announcing that chief executive E. Hunter Harrison died over the weekend. Chief operating officer Jim Foote will serve as acting CEO, the company said. The company's shares fell sharply on Friday on news Harrison suddenly went on medical leave.

Source: AFP/de