Stocks gain on Trump policy bets; S&P breaks $20 trillion

Mon Feb 13, 2017 4:27pm EST
 
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By Chuck Mikolajczak

NEW YORK (Reuters) - A gauge of global equity markets advanced on Monday and bond yields rose as investors flocked to assets likely to benefit from reflationary policies that are expected to be implemented by U.S. President Donald Trump.

Financials and banks in particular led equities on Wall Street higher as investors bet Trump's tax reform plans and softer regulatory environment will boost economic growth and corporate profits.

Comments from Trump on Thursday that he plans to announce what he said would be the most ambitious tax reform plan since the Reagan era in the next few weeks rekindled hopes for big tax cuts while the announced resignation of the Fed's top bank regulator on Friday heightened expectations for a loosening of rules on banks.

"Investors are willing to say the prospects for growth are higher now than they were, and they're not just saying it, they're committing capital," said Jamie Cox, managing partner of Harris Financial Group in Richmond Virginia.

Investors were also encouraged by a U.S.-Japan summit over the weekend apparently having ended smoothly without Trump talking tough on trade, currency or security issues.

In addition, Trump said on Monday the United States will be "tweaking" its trade relationship with Canada, stopping short of calling for a major realignment in a development likely to please visiting Canadian Prime Minister Justin Trudeau.

The Dow Jones Industrial Average rose 142.79 points, or 0.7 percent, to end at 20,412.16, the S&P 500 gained 12.15 points, or 0.52 percent, to 2,328.25 and the Nasdaq Composite added 29.83 points, or 0.52 percent, to 5,763.96.

The advance put the S&P 500's market capitalization above the $20 trillion mark for the first time. Apple the largest component of the S&P 500 and a core holding on Wall Street, climbed 0.9 percent to a record $133.29, breaking its prior closing high of $133.00 set on Feb. 23, 2015 and giving it a market value of about $699.3 billion.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, U.S., January 31, 2017. REUTERS/Lucas Jackson