Tax plan optimism propels Wall St.

NEW YORK — Wall Street hit record closing highs on Monday as optimism increased about the likelihood of lower corporate tax rates as the Republican tax bill moved closer to passage.

The Nasdaq surpassed the 7,000-point mark during the session but closed below that level.

The Republican-controlled US Congress is expected to begin voting on sweeping tax legislation on Tuesday, aiming to get the bill to President Donald Trump to sign into law by the end of the week. Republican US Senator Susan Collins said she would vote for the sweeping overhaul, all but ensuring its passage.

“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.”

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

The bill would cut corporate tax rates to 21% from 35%, 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.

“A lot of the things in the tax proposal are better for stocks than anything else,” said Rob Stein, chief executive officer of Astor Investment Management in Chicago.

The Dow Jones Industrial Average rose 140.46 points, or 0.57%, to 24,792.20, the S&P 500 gained 14.36 points, or 0.54%, to 2,690.17 and the Nasdaq Composite added 58.18 points, or 0.84%, to 6,994.76. Besides the three indices, the Nasdaq 100 and the S&P 100 also hit record highs. The small-cap Russell 2000 rose 1.20% to a record closing high.

The materials index gained 1.50%, the most among the major 11 S&P sectors. The utilities index had the largest decline, with a drop of 1.20%.

Utilities suffer from higher interest rates, which the Federal Reserve announced last week, and they are expected to see less upside from tax cuts than other sectors, Stein said.

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

Shares of Amplify Snack soared 71.60% to $ 12.01 after Hershey said it would buy the SkinnyPop popcorn maker in a $1.60 billion deal. Hershey rose 0.10%.

Snyder’s- Lance rose 6.90% 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 $2.80-billion deal.

Penn National dipped 2.20%, while Pinnacle’s shares were up 0.70%. —