MARKET SNAPSHOT: Dow Futures Soar 200 Points As Markets Get Ready To Rally On Tax Plan Progress

By Barbara Kollmeyer, MarketWatch Features Dow Jones Newswires

U.S. stock markets were gearing up for a sharp rebound on Monday, as Dow Jones Industrial Average futures soared more than 200 points. The gains came as investors shifted their focus away from political tensions in Washington and cheered weekend news that Senate Republicans passed a sweeping overhaul of the U.S. tax code.

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What are stock futures doing?

Futures for the Dow Jones Industrial Average surged 217 points, or 0.9%, to 24,455, while S&P 500 futures rose 15.6 points, or 0.6%, to 2,659.50. Nasdaq-100 futures jumped 29, or 0.5%, to 6,375.

On Friday, the Dow industrials fell 0.2% to 24,231.59, snapping a five-day winning streak. But the index closed off lows that saw the benchmark tumble 300 points (http://www.marketwatch.com/story/tech-stocks-set-to-lead-downturn-for-us-stocks-a-day-after-dow-smashes-through-24000-2017-12-01) at one point, after news about former National Security Adviser Michael Flynn triggered political uncertainty.

In that session, the S&P 500 lost 0.2% to close at 2,642.22, while the Nasdaq Composite Index declined 0.4% to end at 6,847.59.

The Dow industrials could log a new closing record for Monday if the indicated gains come through. On Nov. 30 it closed above 24,272.35, marking its first finish ever above the 24,000 mark.

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What's driving the market?

Progress on the Republican tax plan was in the spotlight for Monday, while investors continued to watch for news of the special counsel's probe of U.S. President Donald Trump's election campaign.

Early Saturday, the Senate passed the Republican-sponsored tax reform proposal almost entirely along party lines (http://www.marketwatch.com/story/senate-passes-tax-bill-advancing-top-republican-priority-2017-12-02), which being viewed as a key victory for U.S. President Donald Trump. Only Democrats and Tennessee Republican Bob Corker voted against it.

Read:Trump celebrates tax-bill victory as opponents vent their fury via #TaxScamBill (http://www.marketwatch.com/story/trump-celebrates-tax-bill-victory-as-opponents-vent-their-fury-via-taxscambill-2017-12-02)

Hopes that the Trump administration and Republicans would usher in a business-friendly tax overhaul have been a driver for the stock market's record-setting streak over the past year. The House and Senate now must agree on a single tax bill before it can be sent to Trump to sign.

Read:Flynn who? For the stock market, it's all about tax cuts and the Santa rally (http://www.marketwatch.com/story/flynn-who-for-the-stock-market-its-all-about-tax-cuts-and-the-santa-rally-2017-12-02)

Rattling markets on Friday was news that Flynn, a former member of Trump's election team, pleaded guilty to lying to federal investigators who are probing Russia's alleged interference in the U.S. election. Another factor was an ABC News report that Flynn was preparing to testify that Trump, as a presidential candidate, directed him to make contact with the Russians, though ABC News later Friday corrected that story (https://www.marketwatch.com/story/abc-news-reporter-brian-ross-suspended-for-4-weeks-for-erroneous-flynn-report-2017-12-03https:/www.marketwatch.com/story/abc-news-reporter-brian-ross-suspended-for-4-weeks-for-erroneous-flynn-report-2017-12-03).

What are strategists saying?

"The market is focused on the historical tax overhaul rather than political tensions and investigations on Donald Trump. The positive trend in the U.S. stock markets could stretch to uncharted territories," said Ipek Ozkardeskaya, senior market analyst with LCG.com, in a note to clients.

"So the chances of tax cuts being placed onto Trump's desk to sign through have increased markedly, and we start this week with the process of reconciliation between both the House and Senate tax plan, while Congress is also trying to pass a continuous resolution (CR) to avoid a government shutdown on 8 December," said Chris Weston, chief market strategist at IG Group, in a note to clients.

"Both issues should keep risk supported, and one questions what is going to really derail sentiment as we head into the final month and one that is traditionally a great breeding ground for equity appreciation," Weston added.

What stocks could be active?

Shares of Aetna Inc.(AET) could be active after CVS Health Corp.(CVS) agreed to buy the U.S.'s third-largest health insurer (http://www.marketwatch.com/story/cvs-to-acquire-health-insurer-aetna-in-years-biggest-deal-valued-at-69-billion-2017-12-03) for about $69 billion in cash and stock.

What's on the data docket?

On the economic front for Monday, a reading on factory orders for October is slated for release at 10 a.m. Eastern Time.

What are other markets doing?

Asian markets were mixed (http://www.marketwatch.com/story/asian-markets-shrug-off-senates-approval-of-tax-bill-2017-12-03), with Hong Kong's Hang Seng Index rising after a string of consecutive losses. But other regional gauges, such as the Nikkei 225 index , came under pressure.

Oil prices fell on Monday, with crude for January down 0.7% to $57.96 a barrel. The ICE Dollar index was up 0.3% to 93.18. Gold dropped 0.4% to $1,277.30 an ounce.

Bitcoin came close to the $12,000 level in Asian trading hours on Monday, and last traded around $11,532.01.

(END) Dow Jones Newswires

December 04, 2017 02:58 ET (07:58 GMT)