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Benchmarks closed near record highs on Monday following a rally in the financial and healthcare stocks. The Dow, S&P 500 and Russell 2000 index, all hit record highs. Moreover, President Trump’s new tax code has boosted broad based gains for the markets. Such enthusiasm in investors over-shadowed the mass shooting incident at Las Vegas on Sunday evening — described by Trump as an act of “pure evil.” Meanwhile, Fed Presidents Neel Kashkari and Rob Kaplan cautioned the Fed to wait until inflation rate touches the 2% level, before hiking interest rates.

The Dow Jones Industrial Average (DJIA) closed at 22,557.60, gaining 0.7%. The S&P 500 Index (INX) increased 0.4% to close at 2,529.12. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,516.72, increasing 0.3%. Advancing issues outnumbered decliners on the NYSE by 1.71-to-1 ratio. On the Nasdaq, advancers outnumbered decliners by 2.16-to-1 ratio. The CBOE VIX decreased 2% to close at 9.32.

Benchmarks Close at a Record

The Dow amassed 152.51 points to notch up a fresh record close on Monday. Such gains were buoyed by a surge in shares 3M Co. (MMM - Free Report) and Goldman Sachs (GS - Free Report) , which gained 1.4% and 1.5%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 added 9.76 points to finish at a record. Of the 11 major sectors of the S&P, nine ended in the green, with healthcare, materials and financial stocks leading the advancers. The Financial Select Sector SPDR ETF (XLF), Health Care Select Sector SPDR ETF (XLV) and Materials Select Sector SPDR ETF (XLB) gained 0.9%, 1% and 1.1% respectively. Healthcare stocks were up following a surge in biotech shares.

The Russell 2000 index notched a fresh record after gaining 1.3% to close at 1,509.47. Meanwhile, Nasdaq advanced almost 21 points to close in the positive territory.

Trump Criticizes the Shooting at Las Vegas

In an address to the country from the White House, President Trump detested the mass shooting at Las Vegas on Sunday evening, terming it an “act of pure evil”. Trump also ordered that flags be flown at half-staff and expressed his gratitude to first responders for saving innocent lives.

Late on Sunday evening, a gunman later identified as a 64 year old man named Stephen Paddock, opened fire from the 32nd floor of a hotel on the crowd attending a country-music concert at Mandalay Bay Casino in Las Vegas. This incident has been described as the worst shooting incident in the history of the United States since the terror attacks of September 11, 2001.

Gun stocks surged following such an incident. Shares of Sturm Ruger (RGR - Free Report) , American Outdoor Brands (AOBC - Free Report) and Olin (OLN - Free Report) rose 4%, 3% and 6%, respectively.

Expectation of Trump’s Tax Reforms Keep Investors Enthused

In an announcement last week, Trump and his aides unveiled new reforms in tax policies which effectively lower taxes on businesses and individuals. The proposal seeks to decrease the corporate tax rate from 35% to 20%. Moreover, the pass-through business taxes — currently categorized under the individual tax code — would be slashed to 25%.

Subsequently, the plan also revealed that the current seven personal tax slabs would be reduced to only three at 12%, 25% and 35%, respectively. This boosted gains for the broader markets as investors remained highly hopeful about the new tax code to be signed into law. This overshadowed the effect of the mass shooting incident at Las Vegas.

Neel Kashkari Warned Fed not to Hike Rates

On Monday, the Minneapolis Fed President Neel Kashkari, cautioned the Fed not to be hasty in raising interest rates. He opined that Fed should wait until inflation reaches the targeted 2% level, before the rates are hiked. Kashkari happens to be one of the voting members of the Fed’s interest rate policy committee and had demurred Fed’s two rate hike this year, citing the same reason.

Moreover, in a Q&A at the Fed’s El Paso branch, Dallas Fed President Rob Kaplan also commented that the Fed should not hurry in raising interest rates and instead wait for the inflation rates to go up.

Economic Data

Construction Spending surged 0.5% in the month of August, surpassing the consensus estimate of an increase of 0.2% for the period. With this, the index gained 2.5% from last year. Meanwhile, the ISM manufacturing index for September rose to 60.8 — hitting its highest level since 2004 — from 58.8 in August. The index surpassed the consensus estimate of 58 for the period.

Stocks That Made Headlines

Lennar Q3 Earnings Top, Home Sales Gross Margin Grows

Lennar Corporation (LEN - Free Report) surpassed expectations on both counts for the seventh time in a row. (Read More)

Walmart Acquires Parcel to Expand in Delivery Space

It seems that Wal-Mart Stores Inc. (WMT - Free Report) is leaving no stone unturned to make its presence felt in the delivery space. (Read More)

Unilever's Mae Terra Buyout to Expand Organic Food Business

Consumer products giant Unilever Plc (UL - Free Report) has been focused on shaping its portfolio to achieve sustainable growth. (Read More)

CenturyLink, Level 3 Communications Deal Gets DOJ Approval

The much-hyped merger between CenturyLink Inc (CTL - Free Report) and Level 3 Communications Inc (LVLT) received regulatory approval from the U.S. Department of Justice (DOJ), subject to certain outlined conditions, including court approval of certain provisions. (Read More)

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