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Dow surges 140 points to record ahead of tax vote, Nasdaq touches 7,000

Key Points
  • The Dow posted its 70th record close of the year.
  • Congress is expected to vote as early as Tuesday on a plan that would slash the federal corporate tax rate to 21 percent from 35 percent.
  • News of several corporate deals also lifted sentiment on Wall Street.
Stocks surge to record highs
Stocks surge to record highs

U.S. stocks closed at all-time highs on Monday as investors eagerly awaited a vote on a bill that would cut corporate taxes. A slew of corporate deals also helped lift sentiment.

The Dow Jones industrial average jumped 140.46 points to 24,792.20, marking its 70th record close of the year. The 30-stock index has also risen more than 5,000 points for the year, its first time ever doing so.

The gained 0.6 percent to a record closing high of 2,690.16, with materials and telecommunications as the best-performing sectors.

The Nasdaq composite also finished at an all-time high, advancing 0.8 percent 6,994.76. The tech-heavy benchmark briefly topped 7,000 for the first time.

"I think this is largely predicated on the belief that the tax plan is going to be passed tomorrow," said Robert Pavlik, chief investment strategist at SlateStone Wealth. "With the belief that corporate taxes will go down, ... investors think the market is not too expensive."

Congress is expected to vote as early as Tuesday on a plan that would slash the federal corporate tax rate to 21 percent from 35 percent. Passing the bill would mark a big legislative win for Republicans, who have been pushing to revamp the U.S. tax code for most of 2017.

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

Equities have risen sharply this year, as investors have awaited the overhaul. The S&P 500 was up 19.5 percent for 2017 entering Monday's session.

The major indexes closed at record highs on Friday, after Republican Sens. Bob Corker and Marco Rubio signaled their support for the bill. Initially, they said they'd vote against the measure.

L. Thomas Block, Washington policy strategist at Fundstrat Global Advisors, said in a note that passing the tax bill would be the "first major Trump accomplishment."

"The bill delivers on several long-held Republican priorities focused on a dramatic reduction of the corporate tax, help to small businesses with relief for pass-through income, and lowering taxes on the middle class through a doubling of the standard deduction," Block said.

Wall Street also got a slew of corporate news on Monday.

Campbell Soup announced it will buy Snyder's-Lance for nearly $4.9 billion. CNBC reported last week that Campbell was in advanced talks to acquire the snacks maker. Snyder's shares popped 7 percent, while Campbell traded 0.1 percent higher.

Chocolate maker Hershey said announced a deal to buy Amplify Snack Brands, the maker of Skinny Pop popcorn, for $12 per share, or 71 percent more than Friday's close of $7. Hershey shares closed 0.1 percent higher, while Amplify Snack Brands jumped 71.6 percent.

Elsewhere, Oracle said it will buy Aconex — a software company based in Australia — for $1.2 billion.

—CNBC's Jacob Pramuk contributed to this report