Stocks climb, lifted by corporate deals and GOP tax plan
U.S. stocks climbed again Monday to new record highs as investors felt more sure that Republicans will pass their tax plan this week. Technology companies rose. So 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; 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 banks, retailers and smaller, U.S.-focused firms.
“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% boost to its profits, and a tax cut 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 is acquiring Amplify Snack Brands for $1.2 billion.
The Standard & Poor’s 500 index rose 14.35 points, or 0.5%, to 2,690.16. The Dow Jones industrial average advanced 140.46 points, or 0.6%, to 24,792.20. The Nasdaq composite traded above 7,000 for the first time but later slipped below that milestone. It ended the day up 58.18 points, or 0.8%, at 6,994.76. The Russell 2000 index of smaller-company stocks climbed 18.50 points, or 1.2%, to 1,548.92.
Campbell Soup will buy pretzel maker Snyder’s-Lance for $50 a share, or $4.87 billion. The deal will give Campbell a group of brands including Snyder’s of Hanover, Kettle Brand and Pop Secret. Snyder’s stock advanced 6.9%, to $50.04. It has surged 27% since Tuesday’s close on reports Campbell Soup was preparing a bid. Campbell shares ticked up 0.1%, to $49.66.
Chocolate and candy maker Hershey agreed to buy Amplify Snack Brands for $12 a share, or $1.2 billion. Amplify’s foods include Skinny Pop popcorn, Tyrrells potato chips and Oatmega protein bars. Amplify went public in August 2015 at $18 a share but had fallen steadily for more than a year. On Monday its stock soared 71.6%, to $12.01. Hershey edged up 0.1%, to $114.26.
Financial companies, including regional U.S. banks, did well Monday. Fifth Third Bancorp rose 1.5% to $30.47. KeyCorp advanced 2% to $20.16.
Among smaller companies, wheel and tire supplier Titan International climbed 8.9% to $12.84. Clothing retailer Abercrombie & Fitch rose 6.7% to $17.83. Instant-win lottery ticket maker Scientific Games advanced 2.5% to $52.10.
Other leaders included technology companies. Apple rose 1.4% to $176.42, an all-time high. Cloud services provider Akamai Technologies leaped 13.7% to $65.67 after Elliott Management, led by activist investor Paul Singer, disclosed a 6.5% stake in Akamai and said it wants to discuss changes to the company’s business and other areas.
Bitcoin futures that began trading on the Chicago Mercantile Exchange on Sunday fell $375, or 1.9%, to $19,125. Bitcoin futures also started trading on the Cboe last week. Neither one involves actual bitcoin. Instead, they enable investors to make bets on what the future price of bitcoin will do.
Benchmark U.S. crude fell 14 cents to $57.16 a barrel in New York. Brent crude, used to price international oils, rose 18 cents to $63.41 a barrel in London. Wholesale gasoline rose 2 cents to $1.67 a gallon. Heating oil rose 2 cents to $1.93 a gallon. Natural gas jumped 13 cents, or 5.1%, to $2.75 per 1,000 cubic feet.
Gold rose $8 to $1,265.50 an ounce. Silver rose 14 cents to $16.21 an ounce. Copper ticked up 1 cent to $3.15 a pound.
Bond prices slipped. The yield on the 10-year Treasury note rose to 2.39% from 2.35%.
The dollar fell to 112.56 yen from 112.63 yen. The euro rose to $1.1784 from $1.1757.
Germany’s DAX rose 1.6%, and the CAC 40 of France climbed 1.3%. In Britain, the FTSE 100 rose 0.6%.
Japan’s Nikkei rose 1.6% after the country’s exports surged in November, driven by robust demand for cars and manufacturing equipment. The Hang Seng in Hong Kong added 0.7% and the South Korean Kospi finished little changed.
UPDATES:
3:15 p.m.: This article was updated with closing prices, context and analyst comment.
8:15 a.m.: This article was updated with market prices and context.
This article was originally published at 7 a.m.
