Nasdaq tops 7,000 for first time on rising tax-cut hopes

By Sruthi Shankar

(Reuters) - The Nasdaq surpassed the 7,000-point mark for the first time in early afternoon on Monday, while the S&P and the Dow were at record levels on rising optimism among traders that Republican promise of lower corporate tax rates would soon be a reality.

More Republicans said on Sunday they expected Congress to pass the tax bill this week, with a Senate vote set for Tuesday and President Donald Trump expected to sign the bill into law by the end of the week.

U.S. stocks have enjoyed a near year-long rally, with the benchmark S&P 500 and the blue-chip Dow Jones Industrial Average set for their best year since 2013.

The bill proposes to cut corporate tax rates to 21 percent from 35 percent, which investors are betting will boost profits as well as trigger share buybacks and higher dividend payouts.

Another expected outcome of lower taxes is cash repatriation, which market analysts say, could boost mergers and acquisitions.

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

At 12:33 p.m. ET(1733 GMT), the Dow Jones Industrial Average was up 180.2 points, or 0.73 percent, at 24,831.94 and the S&P 500 was up 18.04 points, or 0.67 percent, at 2,693.85. The Nasdaq Composite was up 63.82 points, or 0.92 percent, at 7,000.41.

Besides the three indexes, the Nasdaq 100 <.NDX> and the S&P 100 <.OEXA> also hit record intraday highs.

The materials index <.SPLRCM> gained 1.4 percent, the most among the major 11 S&P sectors. Utilities index <.SPLRCU> was the lone decliner, with a drop of 0.8 percent.

On Monday, investors were treated to a flood of deals.

Shares of Amplify Snack soared above 70 percent to $11.99 after Hershey said it would buy the SkinnyPop popcorn maker in a $1.6 billion deal. Hershey rose 0.6 percent.

Synder's-Lance was up about 7 percent after Campbell Soup said it would buy the Pretzels and Cape Cod chips maker for $4.87 billion.

Casino operator Penn National Gaming said it would buy Pinnacle Entertainment in a $2.8 billion deal. Penn National dipped about 5 percent, while Pinnacle's shares were flat.

Twitter jumped more than 8 percent after JPMorgan said it expects the company to post double-digit daily average user growth of 10 percent in 2018.

Advancing issues outnumbered decliners on the NYSE by 2,149 to 708. On the Nasdaq, 2,092 issues rose and 806 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza and Arun Koyyur)