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By Lewis Krauskopf
On Wall Street, the benchmark S&P 500<.SPX> and Dow industrials<.DJI> rose to record highs, while MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.48 percent and hit an all-time peak.
"The big story is indeed the tax reform passage. Until fairly recently, markets were pretty sceptical about whether anything was actually going to happen," said Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, Massachusetts.
"This can have a meaningful impact on corporate earnings here in the U.S. So you are largely seeing a repricing of the U.S. markets based on that," McMillan said.
The Republicans' tax plan is expected to add $1.4 trillion over 10 years to the $20 trillion national debt to finance changes that they say would further boost an already growing economy.
By mid-afternoon, the Dow Jones Industrial Average <.DJI> rose 199.59 points, or 0.82 percent, to 24,431.18, the S&P 500 <.SPX> gained 14.62 points, or 0.55 percent, to 2,656.84 and the Nasdaq Composite <.IXIC> dropped 11.57 points, or 0.17 percent, to 6,836.02.
Some of the biggest gainers were from areas expected to benefit from a lower corporate tax rate. The S&P 500 banks index <.SPXBK> surged 3.0 percent, while the Dow Jones Transport Average <.DJT> jumped 2.8 percent.
"Financials should benefit from not only tax reform but as we start to see rates move higher, their interest margins become more profitable," said Emily Roland, head of investment research at John Hancock Investments in Boston.
In Europe, the pan-European FTSEurofirst 300 index <.FTEU3> rose 0.97 percent.
Gains in the dollar helped Germany's dollar-exposed DAX <.GDAXI> leap from a two-month low, up 1.5 percent.
The dollar rose against a basket of currencies after the tax package moved forward.
The dollar index <.DXY> rose 0.37 percent, with the euro
"Dollar bulls are pinning their hopes on the sweeping tax deal leading to a more rapid pace of interest rate hikes from the Federal Reserve," said Jake Spark, U.S. corporate hedging manager at Western Union Business Solutions, in Washington.
Benchmark 10-year notes
Oil fell on profit-taking as the market eyed signs of rising U.S. production, though prices remained close to recent two-year highs thanks to last week's decision by OPEC and other producers to extend output cuts.
Gold prices fell toward the roughly four-week lows hit last week as the dollar strengthened.
(Additional reporting by Gertrude Chavez-Dreyfuss in New York, Sruthi Shankar and Rama Venkat Raman in Bengaluru, Sujata Rao in London; Editing by Mark Heinrich and Dan Grebler)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)