LDN - Business

Stock futures gain on rising tax bill hopes, corporate dealmaking

[December 18, 2017] By Sruthi Shankar

(Reuters) - U.S. stock index futures were higher on Monday, set to push Wall Street to new records, buoyed as the long-awaited tax overhaul plan looked set for legislation and by a flurry of year-end dealmaking topping $10 billion so far.

- Top U.S. Republicans said on Sunday they expected Congress to pass the tax bill this week, with a Senate vote set for as early as Tuesday and President Donald Trump aiming to sign the bill by the end of the week.

- The three main U.S. stock indexes closed at record highs on Friday after previously undecided Republican Senators backed the tax plan that aims to lower corporate tax rate to 21 percent from 35 percent.

- U.S. stocks have enjoyed a near year-long rally, of late powered by increasing expectations of the promised tax overhaul coming to fruition.

- The benchmark S&P 500 <.SPX> has gained 19.5 percent so far in 2017, set for its best year since 2013, as investors bet that a lower tax bill could boost corporate profits and trigger share buybacks and higher dividend payouts.

- Lower taxes could also trigger cash repatriation, which market analysts say could also be used for merger and acquisitions.

- Shares of Amplify Snack <BETR.N> soared about 66 percent to $36.50 in premarket trading after Hershey <HSY.N> said it would buy the SkinnyPop popcorn maker in a $1.6 billion deal. Hershey shares were flat.

- Synder's-Lance <LNCE.O> was up 5.6 percent at $49.40 after Campbell Soup <CPB.N>, up marginally, said it would buy the Pretzels and Cape Cod chips maker for $4.87 billion.

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 14, 2017. REUTERS/Brendan McDermid

- Casino operator Penn National Gaming <PENN.O> said it would buy Pinnacle Entertainment <PNK.O> in a $2.8 billion deal, a roughly 5 percent premium to Pinnacle's close on Friday. Neither company's shares were trading premarket.

- Oracle was up 0.5 percent after announcing a $1.2 billion deal to buy Australia's Aconex.

- Twitter rose 4.7 percent after JPMorgan upgraded the stock to "overweight" on expectations of a continued rise in daily average users in 2018.

- CSX slipped 4.2 percent after the railroad operator said Chief Executive Hunter Harrison died, leaving the company in the midst of a turnaround he started.

Futures snapshot at 7:11 a.m. ET (1211 GMT):

- Dow e-minis <1YMc2> were up 138 points, or 0.56 percent, with 43 contracts changing hands.

- S&P 500 e-minis <ESc2> were up 10.25 points, or 0.38 percent, with 490 contracts changing hands.

- Nasdaq 100 e-minis <NQc2> were up 37.25 points, or 0.57 percent, in volume of 102 contracts.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza)

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