S&P 500 tops $20 trillion as Wall Street trades on Trump
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Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 21, 2016. REUTERS/Andrew Kelly
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By Noel Randewich
(Reuters) - U.S. equity indexes hit record highs on Monday, with the benchmark S&P 500's market value 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 500 has surged about 9 percent since Trump's Nov. 8 election, boosted by expectations he would lower corporate taxes, ease regulations governing banks and increase infrastructure spending.
Trump has also held high-profile meetings with senior executives from automakers and Silicon Valley technology companies.
"Day after day, corporate executives from a variety of industries are being brought to the White House to consult with the president. Business does seem to be back in the driver's seat, and I think that's why people are willing to pay up a little bit more for stocks," said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia.
The S&P 500 financials index <.SPSY> jumped 1.1 percent, with Citigroup (NYSE: C) up 2.3 percent. The industrial sector <.SPLRCI> gained 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.
The Dow Jones Industrial Average <.DJI> rose 0.7 percent to end at 20,412.16 points, while the S&P 500 <.SPX> gained 0.52 percent to 2,328.25 points.
The Nasdaq Composite <.IXIC> added 0.52 percent to end at 5,763.96.
Apple (NASDAQ: AAPL), a component of all three indexes, rose 0.9 percent and closed 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 (NYSE: VZ) fell 0.9 percent after the telecom carrier said it was bringing back an unlimited data plan, sparking fears of a price war. AT&T (NYSE: T) fell 1.8 percent, T-Mobile (NASDAQ: TMUS) sank 2.4 percent and Sprint (NYSE: S) fell 1.3 percent.
About 6.3 billion shares changed hands in U.S. exchanges, below the 6.7 billion daily average over the last 20 sessions.
Advancing issues outnumbered declining ones on the NYSE by a 1.51-to-1 ratio; on Nasdaq, a 1.39-to-1 ratio favored advancers.
The S&P 500 posted 73 new 52-week highs and no new lows; the Nasdaq Composite recorded 194 new highs and 19 new lows.
(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Bernadette Baum and Nick Zieminski)
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