By Yashaswini Swamynathan
The main U.S. stock indexes hit record intraday highs on Monday, with the S&P 500 topping $20 trillion in combined market-capitalization for the first time ever, as the "Trump trade" jump-started on renewed optimism about the economy.President Donald Trump vowed last week to make a major tax announcement in the next few weeks, rekindling a rally that has stalled amid concerns over Trump's protectionist stance and lack of clarity on policy reforms.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.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.Fundamentals also remain robust. A spate of strong economic data in recent weeks has run parallel with upbeat corporate results.
Earnings of S&P 500 companies are estimated to be on track for their strongest 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 10:55 a.m. ET (1555 GMT), the Dow Jones Industrial Average was up 111.86 points, or 0.55 percent, at 20,381.23.The S&P 500 was up 8.55 points, or 0.36 percent, at 2,324.65 and the Nasdaq Composite was up 24.90 points, or 0.43 percent, at 5,759.03.
Six of the 11 major S&P sectors were higher, led by a 1 percent gain in financials and a 0.9 percent gain in industrials. The two sectors are seen benefiting the most from Trump's policies.Telecom stocks were the top losers, down 1.2 percent after Verizon said it would reintroduce its unlimited data plan, sparking fears of a price war.Verizon was down 0.8 percent. AT&T fell 1.6 percent, T-Mobile sank 3 percent, Sprint fell 1.4 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 15.3 percent after the company and DuPont said they had agreed to pay about $671 million in cash to settle several lawsuits related to the leak of a toxic chemical. DuPont was up nearly 1 percent.Advancing issues outnumbered decliners on the NYSE by 1,727 to 1,061. On the Nasdaq, 1,698 issues rose and 983 fell.The S&P 500 index showed 63 new 52-week highs and no new lows, while the Nasdaq recorded 153 new highs and 11 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)
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Updated Date: Feb 13, 2017 22:30 PM