Deals, hopes for corporate tax cuts drive stocks higher

U.S. stocks climbed again Monday and set more records as investors grew more certain Republicans will pass their tax plan this week. Technology companies climbed, as did banks and retailers, which are likely to see lower taxes.

Stocks have made hefty gains as the GOP appeared to shore up enough support to pass the bill, and congressional Republicans are scheduled to start voting on the legislation Tuesday. The biggest gains have gone to companies that pay relatively higher tax rates, including smaller, U.S.-focused companies, banks and retailers.

“A lot of those companies don’t have, or haven’t taken advantage of, all of the nooks and crannies of the tax code,” said Jason Pride, director of investment strategy at Glenmede. He thinks the average company will get a roughly 4 percent boost to its profits, and a tax break on corporate investment could push companies to spend more money on equipment.

Deal news also helped put investors in a buying mood. Two major food companies agreed to buy smaller snack makers: Campbell Soup plans to purchase pretzel maker Snyder’s-Lance for $4.87 billion, and Hershey will buy Amplify Snack Brands for $1.2 billion.

The Standard & Poor’s 500 index gained 14.35 points, or 0.5 percent, to 2,690.16. The Dow Jones industrial average advanced 140.46 points, or 0.6 percent, to 24,792.20. The Nasdaq composite traded above 7,000 for the first time but later slipped below that milestone. It rose 58.18 points, or 0.8 percent, to 6,994.76. The Russell 2000 index of smaller-company stocks climbed 18.50 points, or 1.2 percent, to 1,548.92.

Financial companies, including regional U.S. banks, did well Monday. Fifth Third Bancorp rose 44 cents, or 1.5 percent, to $30.47, and KeyCorp gained 40 cents, or 2 percent, to $20.16.

Other leaders included technology companies. Apple gained $2.45, or 1.4 percent, to $176.42, another all-time high.