Stock Market News For Dec 19, 2017
Zacks Investment Research | Dec 18, 2017 10:04PM ET
Benchmarks closed in positive territory on Monday following rising optimism that the much awaited Republican tax Bill is likely to be passed this week. This development is expected to reduce U.S. corporate tax rates from 35% to 21%, which in turn led all the three key U.S. indexes to hit their new all-time highs. Additionally, a number of corporate deals also helped boost investor sentiment.
The Dow Jones Industrial Average (DJIA) increased 0.6%, or 140.46 points to close at 24,792.20. The S&P 500 Index (INX) rose 0.5% to close at 2,690.16. The tech-laden Nasdaq Composite Index (IXIC) closed at 6,994.76, gaining 0.8%. A total of 7.1 billion shares were traded on Monday, higher than the last 20-session average of 6.8 billion shares. Advancers outnumbered decliners on the NYSE by a 2.43-to-1 ratio. On Nasdaq, a 2.13-to-1 ratio favored advancing issues. The CBOE VIX decreased 0.3% to close at 9.39.
Tax Cuts Likely this Week
Support from several key policymakers raised optimism that the much awaited Republican tax Bill will be finally passed this week. Lower tax rates are expected to raise dividend payouts, boost share buybacks and improve profits. Optimism surrounding a strong decline in corporate tax rates had a broad-based positive impact on markets.
The Materials Select Sector SPDR (XLB) increased 1.5% and was the best performing sector among the S&P 500. Some opf its key holdings, including LyondellBasell Industries N.V. (NYSE:LYB) and Nucor Corporation (NYSE:NUE) rose 3.3% and 3.2%, respectively. Both the companies have a Zacks Rank #3 (Hold). You can see .
Additionally, the Financial Select Sector SPDR (XLF) rose 1% and is expected to gain further following rising tax cut prospects. Some of its key components, Wells Fargo & Company (NYSE:WFC) and Bank of America Corporation (NYSE:BAC) advanced 1.8% and 1.5%, respectively.
Corporate Deals Boost Sentiment
In acquisitions news, Campbell Soup Company (NYSE:CPB) decided to buy Snyder's-Lance, Inc (NASDAQ:LNCE) for $4.87 billion in cash. Both shares of Snyder's-Lance and Campbell Soup increased 4% and 0.1%, respectively. Additionally, Oracle Corporation (NYSE:ORCL) decided to acquire software developer Aconexfor $1.2 billion or about $5.97 per share in cash. Shares of Oracle fell 1.2% on Monday.
Also, Amplify Snack Brands, Inc’s (NYSE:BETR) shares jumped 71.6% after The Hershey Company (NYSE:HSY) decided to buy the popcorn maker for around $921 million or $12 per share. These corporate deals delivered a significant boost to markets.
The Dow marked its 70th record close on Monday and advanced more than 5,000 points for the first time in a year. Moreover, all the three indexes touched record intraday levels, with the Nasdaq rising more than 7,000 points during the day.
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