Wall Street poised for record on tax bill hopes, merger activity
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 14, 2017. REUTERS/Brendan McDermid
REUTERS: Wall Street's main indexes were set to scale new highs on Monday as the long-awaited tax overhaul plan looked set for legislation and buoyed by a flurry of year-end corporate dealmaking that has topped US$11 billion so far.More U.S. Republicans Senators on Sunday threw their weight behind the tax bill they expect Congress to pass this week. A Senate vote is set for Tuesday and President Donald Trump is expected to sign the bill into law by the end of the week.U.S. stocks have enjoyed a near year-long rally, of late powered by increasing expectations of the promised tax overhaul, which aims to lower corporate taxes to 21 percent from 35 percent, coming to fruition.The benchmark S&P 500 has gained 19.5 percent so far in 2017, set for its best year since 2013, as investors bet that lower taxes could boost corporate profits and trigger share buybacks and higher dividend payouts."The market is going to continue its rally based on the belief that we're going to see the Congress pass tax reform," said Robert Pavlik, Chief Investment Strategist at SlateStone Wealth in New York."People are a bit weary about how long the rally will last, but earnings continue to grow, (the) tax package should help and the economy is doing well," Pavlik said. "I'm very positive about the overall market."
At 8:23 a.m. ET (1323 GMT), S&P 500 e-minis were up 11.25 points, or 0.42 percent, with 616 contracts changing hands. Nasdaq 100 e-minis were up 34.5 points, or 0.53 percent, in volume of 104 contracts. Dow e-minis were up 151 points, or 0.61 percent, with 44 contracts changing hands.Lower corporate taxes could also trigger cash repatriation, which market analysts say could be used for merger and acquisitions. On Monday, investors were treated to a flood of deals.Shares of Amplify Snack soared 70 percent to US$11.96 premarket after Hershey said it would buy the SkinnyPop popcorn maker in a US$1.6 billion deal. Hershey shares dipped 1.44 percent.Synder's-Lance was up about 7 percent at US$49.40 after Campbell Soup said it would buy the Pretzels and Cape Cod chips maker for US$4.87 billion. Campbell shares slid 1.7 percent.
Casino operator Penn National Gaming said it would buy Pinnacle Entertainment in a US$2.8 billion deal. Shares of both companies were up about 4.5 percent.Oracle was up 0.5 percent after announcing a US$1.2 billion deal to buy Australia's Aconex .Twitter rose 5 percent after JPMorgan upgraded the stock to "overweight" on expectations of a rise in daily average users in 2018.Among the decliners was CSX , which slipped 2.2 percent after the railroad operator said Chief Executive Hunter Harrison died amid a turnaround he started.(Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza)
Source : http://www.channelnewsasia.com/news/business/wall-street-poised-for-record-on-tax-bill-hopes--merger-activity-9508052