While you were sleeping: Nasdaq crosses 7000 as tax cut momentum continues

Wall Street rose to fresh records, lifting the Nasdaq above 7000 points for the first time, as investors bet that the Republicans will succeed in finalising a bill this week that will cut corporate taxes.

At the close trading in New York, the Dow Jones Industrial Average surged 140.46 points, or 0.6%, to 24,792.20. The Nasdaq Composite Index rallied 0.8% to 6994.76 while the Standard & Poor's 500 Index gained 0.5% to 2690.16. 

"The stocks that go up the most are the ones that benefit the most from tax cuts," John Serrapere, Arrow Funds Director of Research, told Reuters. He expects retail and telecom companies to benefit the most, according to Reuters.

The Dow climbed to a record, as did the S&P 500 and the Nasdaq. Meanwhile, US Treasuries declined, sending yields on the 10-year note up four basis points to 2.392% from 2.353% on Friday.

"You look around the world and most countries are not just growing but enjoying accelerated growth," James Solloway, senior portfolio strategist at SEI Investments, told Bloomberg.

"In the US, we don't just have that going for us, but it also looks like it's going to be a certainty that we're going to have tax cuts, and a certain amount of tax reform that will be positive for corporations especially."

The Dow rose, led by gains in shares of Intel and those of DowDuPont, recently up 3 percent and 2.3 percent respectively. Bucking the trend, shares of Walt Disney and those of Coca-Cola slid, recently both down 0.4 percent for the largest percentage declines in the Dow.

Food sector acquisitions
The latest corporate deals in the food sector also added to sentiment. 

Campbell Soup agreed to buy Snyder's-Lance, whose brands include Cape Cod potato chips and Snyder's pretzels, for about $US4.9 billion as it seeks to expand in the faster-growing snacking category.

Separately, Hershey agreed to buy Amplify Snack Brands, which owns SkinnyPop popcorn and Tyrrell's potato chips, in a deal valued at about SUS1.6 billion, including debt.

"It will provide our consumers with an even greater variety of better-for-you snacks," Denise Morrison, Campbell's chief executive officer, said in a statement. "This acquisition will dramatically transform Campbell, shifting our centre of gravity and further diversifying our portfolio into the faster-growing snacking category."

Campbell agreed to acquire Snyder's-Lance for $US50 per share in an all-cash transaction, the companies said. The purchase price represents a premium of about 27% to Snyder's-Lance's closing stock price on December 13, the last trading day prior to media reports regarding a potential transaction, the companies said.

Shares of Campbell traded 0.6% higher in New York.

Meanwhile, Hershey agreed to acquire all of the outstanding shares of Amplify for $US12 per share, the companies said. The deal was expected to close in the first quarter of 2018, they said.

Shares of Amplify soared, trading 71% higher at $US11.95 in New York, while Hershey traded 0.9% stronger.

"The acquisition of Amplify and its product portfolio is an important step in our journey to becoming an innovative snacking powerhouse as together it will enable us to bring scale and category management capabilities to a key sub-segment of the warehouse snack aisle," Michele Buck, Hershey's chief executive officer, said in a statement.

In Europe, the Stoxx 600 Index rocketed 1.2%. The UK's FTSE 100 Index rose 0.6%, France's CAC 40 Index climbed 1.3% and Germany's DAX Index advanced 1.6%.

(BusinessDesk)