MARKET SNAPSHOT: Dow, S&P 500 Hit Records On Tax -2-

CVS to buy Aetna for $69 billion

U.S. stocks mostly rallied on Monday, with major indexes hitting intraday records as investors cheered the weekend passage of the Senate version of a sweeping overhaul of the U.S. tax code, as had been widely but not fully expected. However, the Nasdaq fell, pressured by declines in some large-capitalization internet names.

What are stocks doing?

The Dow Jones Industrial Average rose 217 points, or 0.9%, to 24,447. The S&P 500 rose 14 points to 2,656, a gain of 0.5%. The Nasdaq Composite Index fell 23 points, or 0.4%, to 6,824, reversing an earlier gain. Both the Dow and the S&P were at all-time highs, while the Nasdaq was 1.3 percentage point from its own record.

The Russell 2000 index of small companies rose 0.9% and hit an intraday record of its own (

The day's gains were broad, with seven of the 11 primary S&P 500 sectors higher on the day. Several sectors, as measured by the largest exchange-traded funds to track them, hit records of their own, including the materials (, industrials (, and consumer discretionary ( groups.

Financial stocks hit a 10-year high ( and were the biggest gainers of the day, up 2.1%. The sector was on track for its fifth straight daily increase. Among the biggest gainers, Bank of America Corp. (BAC) rose 4.1% while J.P. Morgan Chase & Co. (JPM) was up 2.3%.

On the downside, however, was technology, which tumbled 1.6%. Facebook Inc.(FB) fell 1.6% while Microsoft Corp. (MSFT) was off 2.6% and Alphabet Inc.(GOOGL)--the parent company of Google--slid 0.9%. Other major internet names were also lower, including, which fell 1.5%, and Netflix (NFLX), off 2.3%.

Facebook, Amazon, Netflix, and Alphabet are among the components of the so-called group of "FAANG" stocks, which have been among the market's biggest leaders this year, although portfolio managers have been trimming their allocation to them (

On Friday, markets saw volatile trade after news about former national security adviser Michael Flynn triggered political uncertainty (

Read:It's rare for the Dow to have ramped up like this--here's what typically happens next (

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 (, which being viewed as a key victory for U.S. President Donald Trump.

Read:Trump celebrates tax-bill victory as opponents vent their fury via #TaxScamBill (

Hopes that the Trump administration and Republicans would usher in a business-friendly tax overhaul have been cited as 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.

J.P. Morgan forecast that the S&P 500 would hit 2,800 by early 2018--a level representing upside of 6%--on tax reform, adding that it had been about 50% priced into shares. Last week, the Wells Fargo Investment Institute raised its target for the benchmark index (, citing optimism about taxes.

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 2015 presidential 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, ( ( the contact instead came when Trump was president-elect.

Read:Here's why the stock-market rally is unlikely to be derailed by Michael Flynn (

Further political uncertainty of this type could add more volatility to markets, even though investors said the issue wouldn't have a direct impact on corporate profits or the pace of economic growth--the main drivers of the equity market.

( are strategists saying?

"Getting the tax plan done will still be a challenge, but it doesn't seem as impossible as it once did, and now there's optimism that it could happen before the end of the year, which means it could be made retroactive and change the liability for companies and individuals for this year as well as next, which would be a positive," said Randy Frederick, vice president of trading and derivatives for Charles Schwab.

About the political situation, Frederick said that Friday's decline represented "an emotional reaction that was way overblown." He added that "this issue is out there now, and as more stories associated with it come out, the market will likely have pullbacks on the uncertainty, though this isn't significant enough to derail a bull market that is rising on fundamentals."

See:It's rare for the Dow to have ramped up like this--here's what typically happens next (

What stocks could be active?

Shares of Aetna Inc.(AET) fell 0.5% after CVS Health Corp.(CVS) agreed to buy the U.S.'s third-largest health insurer ( for about $69 billion in cash and stock. CVS fell 5.6%.

Digital Power Corp.(DPW) jumped 23% after the company said its Coolisys Technologies unit launched a line of power systems for cryptocurrency mining (

Shares of General Cable Corp.(BGC) jumped 36% after Italy's cable maker Prysmian SpA (PRY.MI) said it would buy the cable manufacturer in a deal that values it at around $3 billion (

Ironwood Pharmaceuticals Inc.(IRWD) fell 4.5% after it reported positive results ( in mid-stage trials of a treatment for diabetes with hypertension.

Read: Dialog dives 14% after saying it could lose some Apple business (

What's on the data docket?

U.S. factory orders fell 0.1% in October ( largely because of fewer bookings for passenger planes, cars and trucks, the government said Monday.

Investors will get several big pieces of economic data this week, including the nonfarm-payroll report on Friday.

Read:Don't expect strong U.S. hiring to keep up in 2018 (

What are other markets doing?

Asian markets finished mixed (, 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. European stocks were higher across the board with the German DAX 30 index surged by the most in a month (, boosted by news of U.S. tax-plan progress.

Oil prices fell ( on Monday, with crude for January down 0.9% to $57.96 a barrel. The ICE Dollar index was up ( 0.4% to 93.24. Gold dropped 0.5% to $1,275.90 an ounce.

Bitcoin came close ( to the $12,000 level in Asian trading hours on Monday, but has pulled back to last trade around $11,329.17.

(END) Dow Jones Newswires

December 04, 2017 12:53 ET (17:53 GMT)