'Trump effect' rally pushes US stocks to record highs

Republican presidential candidate Donald Trump in Las Vegas. (AP File)
Republican presidential candidate Donald Trump in Las Vegas. (AP File)

New York - Wall Street stocks sprinted to another day of fresh records on Monday, extending last week's rally on expectations President Donald Trump will soon present his promised tax cut plan.

The Dow Jones Industrial Average climbed 0.7% to close the day at 20 412.16.

The broad-based S&P 500 gained 0.5% to end 2 328.25, as did the tech-rich Nasdaq Composite Index up 0.5% to 5 763.96.

It was the third straight session that all three major indices ended at all-time highs following Trump's comments Thursday that he plans to release details about a "phenomenal" tax cut plan in the next two to three weeks.

"It's just a carry over from last week," said Bill Lynch, director of investment at Hinsdale Associates. "The market seems to be giving Trump the benefit of the doubt."

Jack Ablin, chief investment officer at BMO Private Bank, said, "I am getting a sense of a party atmosphere and investors just do not want to be left out."

Among the winners, several banks climbed on expectations that Trump will ease regulations imposed after the 2008 financial crisis. JPMorgan Chase, Goldman Sachs and Citigroup all rose more than one percent.

Technology shares with larger gains included Amazon, up 1.1%, and Tesla Motors, up 4.2%. Apple climbed 0.9% to finish at an all-time closing high of $133.29.

But mobile phone companies were on the downswing after Verizon said it would sell unlimited data packages, a sign of rising competition among providers. Verizon lost 0.9%, AT&T fell 1.8% and T-Mobile US dropped 2.4%.

Zeltiq Aesthetics, a maker of body sculpting technology that essentially freezes away fat, surged 13.2% after agreeing to be acquired by Allergan for $2.5bn. Allergan rose 0.2%.

Teva Pharmaceutical Industries rose 5.6% after reporting a fourth-quarter loss of $973m due to the write down of assets from a recent acquisition. Despite the loss, analysts said they were reassured by the generic drug maker's confirmation of its earnings outlook.
 

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