(Reuters) – Wall Street indexes surged on Monday after the U.S. Senate passed its version of a tax code overhaul, bringing the Republicans closer to implementing corporate tax cuts.
Some of the biggest gainers included bank and industrial stocks. Bank of America and JPMorgan rose more than 3 percent, while Caterpillar and Boeing gained about 2 percent.
“This is a positive reaction to the Senate’s passage,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
The Senate on Saturday approved their version of tax bill in a narrow 51-49 vote. The Senate and the House of Representatives will have to settle differences in their respective versions before it becomes a law.
“That (reconciliation) can be a bit of a challenge because there are differences and the number of approvals to pass it is a little bit higher than it was for the individual two sides of the Congress,” said Frederick.
The S&P 500 has risen about 18 percent this year on strong corporate earnings and solid economic growth and also on hopes that Trump’s agenda of corporate tax cuts and looser regulations could come through.
At 9:35 a.m. ET (1435 GMT), the Dow Jones Industrial Average was up 203.98 points, or 0.84 percent, at 24,435.57, the S&P 500 was up 18.35 points, or 0.70 percent, at 2,660.57 and the Nasdaq Composite was up 41.45 points, or 0.61 percent, at 6,889.04.
Aetna shares rose 1.7 percent after drugstore chain operator CVS Health agreed to buy the health insurer for $69 billion in the year’s largest corporate acquisition. CVS shares were down about 4 percent.
General Cable jumped about 34 percent after Italian rival Prysmian agreed to buy the cable maker in a deal that could value it at about $3 billion, including debt.
Blue Apron rose 6.2 percent after Barclays upgraded the meal-kit delivery company’s stock to “equal-weight”, supporting its move to promote its chief financial officer as the chief executive.
Advancing issues outnumbered decliners on the NYSE by 2,099 to 544. On the Nasdaq, 1,994 issues rose and 518 fell.
(Reporting by Sruthi Shankar and Rama Venkat Raman in Bengaluru; Editing by Arun Koyyur)