Bank stocks favored over tech as tax bill makes headway

By Sruthi Shankar and Rama Venkat Raman

(Reuters) - Wall Street indexes rose on Monday as Republican-led efforts to slash corporate tax rates cleared a major hurdle, with investors picking stocks that have lagged for much of the year including shares of financial and industrial companies.

Bank of America rose as much as 3.9 percent to hit a near-decade high of $29.2, while Boeing shares hit an all-time high at $281.83, gaining 3.9 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.

"We're seeing some rotation away from technology stocks, which is likely due for a breather, into financial stocks and we expect to see that continue," Roland said.

Technology has been the best performing S&P index this year, rising about 34 percent. However, of late tech stocks have been falling out of favor, posting losses in three of the past five sessions.

At 10:55 a.m. ET (1555 GMT), the Dow Jones Industrial Average was up 239.37 points, or 0.99 percent, at 24,470.96 and the S&P 500 was up 11.19 points, or 0.42 percent, at 2,653.41.

The Nasdaq Composite was down 0.54 percent at 6,810.39 on losses in heavyweights Microsoft and Amazon.

The Senate on Saturday approved their version of tax bill in a narrow 51-49 vote.

Once the Senate and House of Representatives reconcile their respective versions of the legislation, the resulting bill could cut corporate tax rates to 20 percent from 35 percent.

The S&P 500 has risen about 18 percent this year on strong corporate earnings and solid economic growth as well as on the hope that Trump's agenda of corporate tax cuts and looser regulations could come through.

Among other movers, Aetna shares rose 0.7 percent after drugstore chain operator CVS Health agreed to buy the health insurer for $69 billion in the year's largest corporate acquisition. CVS shares were down about 4 percent.

General Cable jumped about 34 percent after Italian rival Prysmian agreed to buy the cable maker in a deal that could value it at about $3 billion, including debt.

Advancing issues outnumbered decliners on the NYSE by 1,763 to 1,019. On the Nasdaq, 1,575 issues rose and 1,226 fell.

(Reporting by Sruthi Shankar and Rama Venkat Raman in Bengaluru; Editing by Arun Koyyur)