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Wall Street jumps 2% as Americans head to polls

Wall Street’s main indexes jumped on Tuesday as investors bet that one of the country’s most divisive presidential races could end with a clear victory for Democratic nominee Joe Biden and a swift deal on more fiscal stimulus. Photo: EPA-EFE/JUSTIN LANE

Wall Street’s main indexes jumped on Tuesday as investors bet that one of the country’s most divisive presidential races could end with a clear victory for Democratic nominee Joe Biden and a swift deal on more fiscal stimulus. Photo: EPA-EFE/JUSTIN LANE

Published Nov 3, 2020

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INTERNATIONAL - Wall Street’s main indexes jumped on Tuesday as investors bet that one of the country’s most divisive presidential races could end with a clear victory for Democratic nominee Joe Biden and a swift deal on more fiscal stimulus.

All 11 major S&P indexes were up in morning trading, led by financial, healthcare and industrial stocks as investors also reined in some of the bets on post-vote volatility that dominated in recent weeks.

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Not all of the infrastructure and other stocks which analysts have identified as likely winners from a Democrat sweep were up, with marijuana and renewable energy companies down, some as much as 4 percent.

The lead for Biden in national opinion polls, however, has raised expectations for a decisive outcome in Tuesday’s election and a post-election stimulus package that would make good on his promises of infrastructure spending.

“There is some optimism that we might have a quick resolution to the election,” said Ryan Detrick, senior market strategist for LPL Financial in Charlotte, North Carolina.

“The market is going to accept a couple of days (of delay) but if we get to Friday and it looks like it’s going to take longer than that, that could upset markets and we could lose a lot of these big gains.”

Democrats are also favored to emerge from 14 hotly contested US Senate races with full control of Congress, although final results from at least five of those contests may not be available for days, and in some cases, months.

Still, the competition in swing states is seen as close enough that President Donald Trump could piece together the 270 Electoral College votes he needs to stay in the White House for another four years.

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US stock index futures plunged on Election Night 2016 when it appeared Trump was becoming more likely to pull out an upset victory against then-Democratic nominee Hillary Clinton. The benchmark S&P 500 has since risen 55 percent as lower tax rates under the Trump administration boosted corporate profits.

Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh, said a Biden victory could lead to some inflation, which would be beneficial to banks in particular.

“A Federal Reserve committed to keeping rates lower and yet allowing not a flat curve, but one with some steepening to it, and then some inflation and you get yourself a hip hip hooray for banks.”

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The S&P banking subindex surged 2.5 percent to its highest in more than a week, while industrial stocks such as Caterpillar and Honeywell International rose about 2 percent each.

At 01:01 p.m. ET, the Dow Jones Industrial Average rose 533.88 points, or 1.98 percent, to 27,458.93 and the S&P 500 .SPX gained 62.16 points, or 1.88 percent, to 3,372.40. The Nasdaq Composite .IXIC gained 224.05 points, or 2.04 percent, to 11,181.66.

Advancing issues outnumbered decliners 5.2-to-1 on the NYSE and 3.6-to-1 on the Nasdaq.

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The S&P index recorded 26 new 52-week highs and no new low, while the Nasdaq recorded 44 new highs and 17 new lows.

REUTERS

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