September 10, 2018 / 2:15 PM / 7 months ago

US STOCKS-Wall St higher as tax cut hopes keep trade war fears at bay

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* Republicans to unveil new round of tax cuts this week

* Trump ready for more tariffs on nearly all Chinese imports

* Apple down; Stock fell Friday on trade-related fears

* Alibaba falls as Jack Ma announces plan to step down

* Indexes up: Dow 0.32 pct, S&P 0.42 pct, Nasdaq 0.19 pct (Changes comment, updates to open)

By Shreyashi Sanyal

Sept 10 (Reuters) - U.S. stock indexes were higher on Monday, boosted by the consumer discretionary sector and as hopes for a new round of tax cuts overshadowed fears of an escalation in the Sino-U.S. trade war.

Republicans in the U.S. House of Representatives plan to unveil a fresh round of tax cuts this week, hoping to draw a sharp contrast between themselves and Democrats ahead of the Nov. 6 congressional elections.

Dubbed “Tax Reform 2.0”, the package is intended to augment Trump’s 2017 tax overhaul, which added $1.5 trillion to the federal deficit through permanent tax cuts for U.S. companies.

“There is definitely a sense that Congress is going to get these tax cuts implemented before the end of this month and the positivity around that could be pushing the markets higher,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

“Despite all the trade tensions there’s still general optimism because the full effect of the previous tax cuts haven’t been seen yet.”

All of the 11 major S&P sectors were higher and boosted the consumer discretionary sector which gained 0.51 percent helped by gains in shares of Nike.

The energy stocks followed, with a 0.83 percent rise as oil prices climbed after U.S. drilling stalled and investors anticipated lower supply once new U.S. sanctions against Iran’s crude exports kick in from November.

The trade-sensitive industrial sector was up 0.74 percent.

At 9:56 a.m. ET the Dow Jones Industrial Average was up 82.62 points, or 0.32 percent, at 25,999.16, the S&P 500 was up 12.15 points, or 0.42 percent, at 2,883.83 and the Nasdaq Composite was up 15.36 points, or 0.19 percent, at 7,917.90.

On Friday, Trump said he was ready to levy additional taxes on practically all Chinese imports, threatening duties on $267 billion of goods over and above planned tariffs on $200 billion of Chinese products. China said it will respond if Washington takes any new steps on trade.

Apple dropped 1.4 percent. The stock had dropped on Friday after the company said a “wide range” of products would be hit by the proposed tariffs, although it did not mention the iPhone.

Nike edged up 2.1 percent after Wedbush said it sees scope for higher sales growth and margin expansion at the world’s largest footwear maker. climbed 0.3 percent after Wells Fargo raised its price target for the e-commerce giant’s shares saying the company will become the No.1 seller of apparel in the U.S. this year.

Tesla rose 3.7 percent after brokerage Baird named the electric carmaker’s stock its “fresh pick”, saying strong fundamentals could drive shares higher ahead of the company’s quarterly earnings.

Alibaba dropped 1.4 percent after the company said Jack Ma will step down as chairman in one year, passing on the reins to trusted lieutenant, Chief Executive Officer Daniel Zhang.

Advancing issues outnumbered decliners for a 3.22-to-1 ratio on the NYSE and a 1.86-to-1 ratio on the Nasdaq.

The S&P index recorded 30 new 52-week highs and one new low, while the Nasdaq recorded 43 new highs and 19 new lows. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)

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