By Yashaswini Swamynathan
The main U.S. stock indexes hit record intraday highs on Monday, with the S&P 500's market capitalization topping $20 trillion for the first time ever, as the "Trump trade" was jump-started on renewed optimism about the economy.President Donald Trump vowed last Thursday to make a major tax announcement in the next few weeks, rekindling a rally that has stalled amid concerns over his protectionist stance and lack of clarity on policy reforms.Financials jumped 1.2 percent, with banks leading the way. The S&P 500 banks index leaped 1.5 percent. The industrial sector gained 0.84 percent. Financials and industrials are seen benefiting the most, among the 11 major S&P sectors, from Trump's policies.The S&P has surged 8.3 percent since Trump's Nov. 8 election through Friday's close, fueled by expectations Trump would lower corporate taxes, reduce regulations and increase infrastructure spending."At some point there has to be actions that match the words and I think we are getting closer to that point," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.Fundamentals also remain robust, with strong economic data in recent weeks 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," Schutte said.At 12:27 p.m. ET (1727 GMT), the Dow Jones Industrial Average was up 128.69 points, or 0.63 percent, at 20,398.06.The Nasdaq Composite was up 28.32 points, or 0.49 percent, at 5,762.45 and the S&P 500 was up 10.33 points, or 0.44 percent, at 2,326.43.
The S&P has not dropped more than 1 percent since Trump's election victory. It has gained more than 1 percent on only two occasions, the day after Election Day and on Dec. 7.Among the weak spots were telecom stocks, which dropped 1.04 percent after Verizon's brought back its unlimited data plan, sparking fears of a price war.Verizon was down 0.98 percent. AT&T fell 1.1 percent, T-Mobile sank 3 percent, Sprint fell 1.2 percent.
Apple was the top stock on the S&P and the Nasdaq, rising 1.2 percent and closing on its record high.Chemours rose 13 percent after the company and DuPont agreed to settle lawsuits related to a chemical leak for about $671 million, which Jefferies said was $300 million less than their consensus. DuPont was up about 1 percent.Advancing issues outnumbered decliners on the NYSE by 1,704 to 1,165. On the Nasdaq, 1,683 issues rose and 1,120 fell.The S&P 500 index showed 64 new 52-week highs and no new lows, while the Nasdaq recorded 166 new highs and 14 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)
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Updated Date: Feb 14, 2017 00:30 AM