By Noel Randewich
U.S. equity indexes hit record intraday highs on Monday, with the benchmark S&P 500's market capitalisation topping $20 trillion as investors bet tax cuts promised by President Donald Trump would boost the economy.Trump vowed last Thursday to make a major tax announcement over the next few weeks, adding fuel to a rally that had stalled amid worries about the potential impact of his protectionist trade stance and a lack of clarity about other policy reforms.The S&P has surged 9 percent since Trump's Nov. 8 election, boosted by expectations he would lower corporate taxes, ease regulations governing banks and increase infrastructure spending."Investors are willing to say the prospects for growth are higher now than they were, and they're not just saying it, they're committing capital," said Jamie Cox, managing partner of Harris Financial Group in Richmond Virginia.The S&P 500 financials index .SPSY jumped 1.4 percent, with banks leading the way. The industrial sector .SPLRCI gained 1.1 percent. The two sectors are seen benefiting heavily from Trump's policies.
Strong economic data in recent weeks has been supported by upbeat corporate results. S&P 500 companies are on track for their strongest profit growth in nine quarters, according to Thomson Reuters I/B/E/S."What is underlying this whole Trump rhetoric is that fundamentals in the world, including the U.S., are getting better," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.At 2:05 p.m. ET, the Dow Jones Industrial Average .DJI was up 0.78 percent at 20,427.17 points, while the S&P 500 .SPX gained 0.59 percent to 2,329.78.
The Nasdaq Composite .IXIC added 0.6 percent to 5,768.30.Apple (AAPL.O), a component of all three indexes, rose 1.1 percent and was on track to close at a record high for the first time since 2015. Goldman Sachs increased its target price for Apple's shares on expectations of strong iPhone sales this year.
Verizon Communications fell 0.8 percent after the telecom carrier said it was bringing back an unlimited data plan, sparking fears of a price war. AT&T (T.N) fell 1.7 percent, T-Mobile (TMUS.O) sank 2.8 percent and Sprint (S.N) fell 1.2 percent.Advancing issues outnumbered declining ones on the NYSE by a 1.70-to-1 ratio; on Nasdaq, a 1.47-to-1 ratio favored advancers.The S&P 500 posted 71 new 52-week highs and no new lows; the Nasdaq Composite recorded 182 new highs and 17 new lows. (Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Bernadette Baum)
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Updated Date: Feb 14, 2017 01:15:05 IST