NEW YORK: Wall Street stocks rose for a third straight session on Tuesday (Nov 8) as the US midterm elections dominated attention ahead of key economic data later in the week.
With Republican challengers to President Joe Biden’s Democratic party expected to win at least one house of Congress, market watchers are anticipating gridlock in Washington – traditionally a benign scenario for equities.
“On balance, financial markets like gridlock. To the extent that change will be slow and evolving, a divided government of course provides that backdrop,” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis.
A surprise victory for Democrats, however, could raise concerns about tech-sector regulation as well as budget spending that could add to already-high inflation, according to market strategists.
“The positive spin the market is placing on gridlock is that it will remove some political uncertainty and will lessen the prospect of new tax hikes, further regulatory pressure and additional large spending plans,” said Briefing.com analyst Patrick O’Hare.
The Dow Jones Industrial Average finished with an increase of 1% at 33,160.83.
The broad-based S&P 500 rose 0.6% to 3,828.11, while the tech-rich Nasdaq Composite Index advanced 0.5% to 10,616.20.
The S&P 500 is up about 7% from its October closing low, but it remains down about 20% in 2022 due to worries that the Fed's aggressive rate hikes could cripple the US economy.
The gains came as investors looked ahead to tomorrow’s (Nov 10) critical consumer price report that will likely influence the course of US monetary policy.
Among individual companies, Lyft sank 22.9% as the ride-hailing firm reported a US$422.2 million loss even as it pointed to strong demand from customers. Analysts cited fears the company is losing market share to rival Uber.
DuPont jumped 7.3% as the chemical maker reported better-than-expected results and announced a US$5 billion share repurchase programme. – AFP, Reuters
