Sharechat Logo

While you were sleeping: Tax outlook lifts Wall St

Tuesday 19th December 2017

Text too small?

Wall Street rose to fresh records, lifting the Nasdaq above 7,000 points, as investors bet that the Republicans will succeed in finalising a bill this week that will cut corporate taxes. 

In 1.16pm trading in New York, the Dow Jones Industrial Average climbed 0.7 percent, while the Nasdaq Composite Index rallied 0.9 percent. In 1.01pm trading, the Standard & Poor’s 500 Index gained 0.6 percent. 

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

The Dow climbed to a record, as did the S&P 500 and the Nasdaq. Meanwhile, US Treasuries declined, sending yields on the 10-year note three basis points to 2.38 percent.

“You look around the world and most countries are not just growing but enjoying accelerated growth,” James Solloway, senior portfolio strategist at SEI Investments, told Bloomberg. “In the US, we don’t just have that going for us, but it also looks like it’s going to be a certainty that we’re going to have tax cuts, and a certain amount of tax reform that will be positive for corporations especially.”

The Dow rose, led by gains in shares of Intel and those of DowDuPont, recently up 3 percent and 2.3 percent respectively. Bucking the trend, shares of Walt Disney and those of Coca-Cola slid, recently both down 0.4 percent for the largest percentage declines in the Dow.

The latest corporate deals also added to sentiment. 

Campbell Soup agreed to buy Snyder’s-Lance, whose brands include Cape Cod potato chips and Snyder’s pretzels, for about US$4.9 billion as it seeks to expand in the faster-growing snacking category.

Separately, Hershey agreed to buy Amplify Snack Brands, which owns SkinnyPop popcorn and Tyrrell’s potato chips, in a deal valued at about US$1.6 billion, including debt. 

"It will provide our consumers with an even greater variety of better-for-you snacks," Denise Morrison, Campbell’s chief executive officer, said in a statement. “This acquisition will dramatically transform Campbell, shifting our centre of gravity and further diversifying our portfolio into the faster-growing snacking category.”

Campbell agreed to acquire Snyder’s-Lance for US$50 per share in an all-cash transaction, the companies said. The purchase price represents a premium of about 27 percent to Snyder’s-Lance’s closing stock price on December 13, the last trading day prior to media reports regarding a potential transaction, the companies said. 

Shares of Campbell traded 0.6 percent higher as of 12.21pm in New York. 

Meanwhile, Hershey agreed to acquire all of the outstanding shares of Amplify for US$12 per share, the companies said. The deal is expected to close in the first quarter of 2018, they said. 

Shares of Amplify soared, trading 71 percent higher at US$11.95 as of 12.05pm in New York, while shares of Hershey traded 0.9 percent stronger.

"The acquisition of Amplify and its product portfolio is an important step in our journey to becoming an innovative snacking powerhouse as together it will enable us to bring scale and category management capabilities to a key sub-segment of the warehouse snack aisle," Michele Buck, Hershey's chief executive officer, said in a statement. 

In Europe, the Stoxx 600 Index finished the day with a1.2 percent rally from the previous close. The UK’s FTSE 100 Index rose 0.6 percent, France’s CAC 40 Index climbed 1.3 percent, while Germany’s DAX Index advanced 1.6 percent.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

AIA June 2020 Monthly Traffic Update and July 2020 Preview
PCT - Delivering on strategy underpins strong operating result
KFL - August 2020 monthly update
BRM - August 2020 monthly update
MLN - August 2020 monthly update
Further COVID-19 Restrictions at SkyCity’s New Zealand Properties
FY20 results guidance met, Results date, Banking Facility
Sky sells OSB assets to NEP NZ, secures 10 year partnership
NZX fully operational - announcement re COVID-19
Heartland Market Update

IRG See IRG research reports