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US STOCKS-Wall St rises to records as Trump ignites tax-cut hopes
February 9, 2017 / 7:48 PM / 10 months ago

US STOCKS-Wall St rises to records as Trump ignites tax-cut hopes

* Trump says to make “phenomenal” tax announcement in few weeks

* Financial sector set to snap three-day losing streak

* Viacom, Kellogg gain after results; Coca-Cola slumps

* Indexes up: Dow 0.67 pct, S&P 500 0.64 pct, Nasdaq 0.66 pct (Updates to late afternoon)

By Lewis Krauskopf

Feb 9 (Reuters) - Wall Street’s three main indexes hit record highs on Thursday after President Donald Trump said he would make a major tax announcement in a few weeks.

“Lowering the overall tax burden on American business is big league,” Trump said during a White House meeting with airline industry executives.

U.S. stocks have rallied since Trump’s Nov. 8 election amid expectations he will not only usher in lower corporate taxes, but also reduced regulations and increased infrastructure spending. The rally had stagnated in recent days as investors seek details about Trump’s economic policy agenda.

Financials, which have soared since the election, were the best-performing group, up 1.3 percent after three sessions of declines, while energy shares gained 0.9 percent.

Those sectors stand to benefit should lower taxes spur economic activity as interest rates and the demand for energy rise, said Bruce McCain, chief investment strategist at Key Private Bank, in Cleveland.

“Given the groups that responded and the enthusiasms within the market, it seems to be the tax comments that lit off the rally today,” said Bruce McCain, chief investment strategist at Key Private Bank, in Cleveland.

But, McCain said, “when you get to these levels of market sentiment, usually the returns are much more modest and you’re much more subject to a pullback.”

The Dow Jones Industrial Average rose 134.14 points, or 0.67 percent, to 20,188.48, the S&P 500 gained 14.72 points, or 0.64 percent, to 2,309.39 and the Nasdaq Composite added 37.58 points, or 0.66 percent, to 5,720.03.

All three indexes hit new intraday all-time highs.

The utilities sector, which is considered a defensive bet, fell 0.9 percent, the worst-performing group.

The focus on Washington comes with U.S. companies in the midst of their corporate reporting season.

With about 70 percent of the S&P 500 having reported results, fourth-quarter earnings are on track to have climbed 8.5 percent, which would be the best performance since the third quarter of 2014, according to Thomson Reuters I/B/E/S.

Shares of Viacom, Kellogg and Prudential all gained after their respective quarterly results.

Coca-Cola forecast a surprise drop in full-year profit. Its shares fell 2.4 and were the biggest drag on the Dow and the S&P.

Twitter tumbled 11.9 percent after the social network reported its slowest quarterly revenue growth since going public in 2013.

Airline stocks rose, with JetBlue, Delta and American Airlines up more than 2 percent, after Trump’s meeting with airline executives.

Advancing issues outnumbered declining ones on the NYSE by a 2.11-to-1 ratio; on Nasdaq, a 2.80-to-1 ratio favored advancers.

The S&P 500 posted 39 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 124 new highs and 19 new lows. (additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D‘Silva and Nick Zieminski)

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