Stocks fire to record highs as investors eye tax plan
NEW YORK - U.S. stocks made more gains Monday as investors react to the Republican tax plan, which could boost corporate profits and stock prices, as well as several corporate deals.
All four major indexes closed at record highs. The Standard & Poor's 500 index jumped 14 points, or 0.5 percent, to close at 2,690. The Dow Jones industrial average advanced 141 points, or 0.6 percent, to end at 24,792. The Nasdaq composite briefly crested above 7,000 for the first time before slipping to 6,995, up 58 points. The Russell 2000 index of smaller-company stocks climbed 17 points, or 1.1 percent, to 1,548.
Stocks climbed Friday as Republicans in Congress appeared to shore up support to pass their tax plan. They hope to muscle the $1.5 trillion bill through Congress this week before a year-end break. The bill slashes the corporate tax rate, and that's especially significant for smaller and more domestically-focused companies because they pay higher rates than larger, more multi-national companies do.
Financial companies including regional U.S. banks did well Monday. Capital One surged $3.43, or 3.6 percent, to $99.74 and Fifth Third Bancorp rose 62 cents, or 2.1 percent, to $30.65. Other leaders included technology companies. Apple was on track for a new high as it gained $2.41, or 1.4 percent, to $176.39.
Another financial instrument who value has surged this year are so-called cryptocurrencies. Bitcoin futures began trading Monday on the Chicago Mercantile Exchange, dipping $575, or 2.9 percent, to $18,925. Bitcoin futures started trading on the Chicago Board Options Exchange last week. Neither one involves trading actual bitcoin; instead, they track indexes of bitcoin prices as investors make bets on what the price will do.
In what would be a first for stocks, the S&P 500, which has risen more than 18 percent this year, is on track to notch positive returns in all 12 months of 2017, according to LPL Financial. The Dow, up 25 percent in 2017, has reached a new high 69 times this year.
Despite that surge, many investment analysts discount the likelihood of a sharp downturn in stocks anytime soon, citing solid US economic growth.
"Although we are forecasting that the S&P 500 will come off the boil a bit next year as rising wages squeeze profits and the dollar recovers, we are anticipating that the economy will continue to fare well," analysts with Capital Economics said in a note.
