Please ensure Javascript is enabled for purposes of website accessibility

Thai Fighter Jet Bombs Cambodian Targets as Border Battle Escalates

12 hours ago

California Cannot Require Background Checks to Buy Ammunition, US Appeals Court Rules

14 hours ago

Wrestling Legend Hulk Hogan Dies at 71, TMZ Reports

15 hours ago

TikTok Will Go Dark in US Without Chinese Approval of Sale Deal, Lutnick Says

16 hours ago

Meme Stock Surge Underlines Market Froth, Mostly Centered on Retail Investors

16 hours ago

Fresno County Authorities Still Searching for Missing Mother and Infant

16 hours ago

California Releases Teacher Data. It Shows Big Rise in Hispanic Teachers

16 hours ago

Biting a Bat and 5 Other Wild Moments From Ozzy Osbourne’s Life

17 hours ago

Henry Thompson Did Wonders for Fresno Airport, Leaves ‘Incredibly Big Shoes to Fill’

1 day ago
Tech Leads Rally as Wall Street Shrugs Off Election Limbo
gvw_ap_news
By Associated Press
Published 5 years ago on
November 5, 2020

Share

Technology and health care companies led a stock market rally Wednesday, as Wall Street embraced the upside of more gridlock in Washington even as the outcome of the U.S. presidential election remained in limbo.

The S&P 500 rose 2.2% for its best day in five months. The benchmark index had been up 3.5% before the market lost some of its momentum toward the end of the day. That pullback wiped out more than 450 points from the Dow Jones Industrial Average, though the blue-chip index still closed more than 360 points higher.

The Nasdaq was the standout, notching its biggest gain in more than six months as traders doubled down on technology stocks. Health insurers were big winners, too, as prospects for an overhaul of the industry dimmed.

The fate of the U.S. presidency remains undecided as neither President Donald Trump or Democratic challenger Joe Biden had secured the 270 Electoral College votes needed to win by Wednesday afternoon. But after a tumultuous overnight session in global markets where Trump prematurely declared victory, Wall Street acted as if the occupant of the White House might be secondary.

Analysts said the gains came as markets focused on the benefits of the country’s political control remaining split between Democrats and Republicans. With Republicans edging closer to retaining control of the Senate, prospects dimmed for the tax increases and tighter regulations on businesses that investors expected if Democrats scored an electoral sweep, although a big stimulus effort for the economy that some on Wall Street say is needed now seems unlikely as well.

“The first information that people are digesting is that a split government is OK, and we can deal with this,” said Melda Mergen, deputy global head of equities at Columbia Threadneedle. “No big changes are expected anytime soon on the policy side.”

She cautioned, though, that the initial moves for the market may not last. “It’s a very quick reaction without knowing the final results,” she said. “It’s emotional rather than rational.”

They Don’t Need a Big Stimulus Effort for the Economy

The S&P 500 rose 74.42 points to 3,443.44. The Dow added 367.63 points, or 1.3%, to 27,847.66. The Nasdaq gained 430.21 points, or 3.9%, to 11,590.78.

Much of Wednesday’s strength for Wall Street was due to big gains for technology stocks. Investors have increasingly seen these stocks as some of the safer bets in the market, able to grow their profits even in a pandemic as more of daily life shifts online.

They don’t need a big stimulus effort for the economy as much as other companies, and the likelihood of Washington approving such a package dropped with the chances of a Democratic sweep. That led to the much better performance for the tech-heavy Nasdaq over other indexes. Microsoft rose 4.8%, Amazon climbed 6.3%, Facebook surged 8.3%, and Google’s parent company gained 6.1%.

Cigna, UnitedHealth Group and Anthem were among the biggest gainers in the S&P 500, as investors bid up health care stocks.

Other areas of the stock market, where profits are more dependent on the strength of the economy, lagged behind. Financial stocks in the S&P 500 dropped 1.3%. Companies that make construction materials and could have benefited from a big infrastructure plan under a Democratic sweep also fell.

Some of the market’s sharpest moves overnight were in yields for U.S. government bonds, which had earlier risen on growing expectations for big economic stimulus.

The 10-year Treasury yield swung from 0.88% late Tuesday up to 0.94% as polls were closing. It then sank as low as 0.75% after Trump made premature claims of victories in several key states, Republicans held onto Senate seats and a couple economic reports came in weaker than expected. It slipped to 0.76% in late-afternoon trading.

The Uncertainty Seems Set to Linger

All the swings are a bit reminiscent of four years earlier, when Trump surprised the market by winning the White House. Markets initially tumbled after polls and the market’s expectations proved to be so wrong in 2016, but they quickly turned around on expectations that Trump’s pro-business stance would be good for corporate profits.

The difference this time is that the uncertainty seems set to linger. It may take days for a winner of the White House to emerge, and professional investors say they’re bracing for sharp market swings in the meantime. The Trump campaign on Wednesday filed lawsuits over the voting in Michigan and Pennsylvania, and earlier the president said he’d take the election to the Supreme Court, though it’s unclear exactly what he means by that.

A drawn-out court battle “just adds more and more uncertainty, and the last thing the market needs is that,” said Quincy Krosby, chief market strategist at Prudential Financial.

Many fund managers suggest investors hold steady through the tumult in large part because one person can’t singlehandedly move the economy and stocks tend to rise regardless of which party controls the White House. What happens with the coronavirus pandemic is likely to have a much greater effect on markets than this election’s results, they say.

“It’s really about the solution to the health crisis and how do we bridge between now and that eventual period of time,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.

Uber soared 14.6% and Lyft jumped 11.3% after the ride-hailing companies won a vote in California allowing them to continue classifying their drivers as contractors instead of employees and preserve their business models.

European markets also closed broadly higher. Besides the election’s impact on Trump’s enthusiasm for tariffs, European investors are also watching what it will do to the U.S. dollar’s value. By making additional stimulus less likely, a divided U.S. government could force the Federal Reserve to do even more on its own to support the economy, which could send the dollar lower against the euro and other currencies.

The Fed will announce its latest decision on interest-rate policy on Thursday. Its moves earlier this year to slash interest rates to record lows and prop up bond markets have helped Wall Street soar since March.

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

The Entz Era Begins at Fresno State With QB Job Up for Grabs

DON'T MISS

Hoover High School Coach Arrested on Child Pornography Charges

DON'T MISS

Hulk Hogan Is Gone, but Hulkamania Rolls On in Fresno and Around the Globe

DON'T MISS

Fresno Brewery Teams With Japanese Sister City on Rice Lager Release

DON'T MISS

US Justice Department Official Meets Epstein Associate Maxwell

DON'T MISS

Clovis Police Arrest Two in Mail Theft During Organized Retail Crime Detail

DON'T MISS

California Political Lobbying Firm Agrees to Settle Federal Fraud Allegations

DON'T MISS

Lara Trump Skips North Carolina US Senate Race, Clears Way for Cooper Versus Whatley

DON'T MISS

Madera County Authorities Dismantle Illegal Marijuana Grow Operation

DON'T MISS

Israel and US Recall Teams From Gaza Truce Talks, US Says Hamas Not Showing Good Faith

UP NEXT

Lara Trump Skips North Carolina US Senate Race, Clears Way for Cooper Versus Whatley

UP NEXT

Michael Whatley, RNC Chair, to Run for Senate in North Carolina

UP NEXT

Video-Sharing App Vine Is Returning ‘in AI Form’, Musk Says

UP NEXT

CBS News Taps Tanya Simon as New Boss of ’60 Minutes’ After Trump Lawsuit

UP NEXT

Justice Department to Assess Claims of ‘Alleged Weaponization’ of US Intelligence Community

UP NEXT

White House Not Denying That Trump’s Name Appears in Epstein Files, Official Says

UP NEXT

White House Taps Mining Expert to Head National Security Office, Sources Say

UP NEXT

White House Says WSJ Report on Trump Being Told Name in Epstein Files “Fake News”

UP NEXT

US Judge Rejects Bid to Unseal Epstein Grand Jury Transcripts From Florida Probe

UP NEXT

US Republicans Continue Push to Override California Animal Welfare Law

Fresno Brewery Teams With Japanese Sister City on Rice Lager Release

9 hours ago

US Justice Department Official Meets Epstein Associate Maxwell

9 hours ago

Clovis Police Arrest Two in Mail Theft During Organized Retail Crime Detail

10 hours ago

California Political Lobbying Firm Agrees to Settle Federal Fraud Allegations

10 hours ago

Lara Trump Skips North Carolina US Senate Race, Clears Way for Cooper Versus Whatley

10 hours ago

Madera County Authorities Dismantle Illegal Marijuana Grow Operation

10 hours ago

Israel and US Recall Teams From Gaza Truce Talks, US Says Hamas Not Showing Good Faith

11 hours ago

How Long Will Fresno’s Resort-Like Summer Weather Continue?

11 hours ago

Tulare County Judge Reduces Sentence for Teen Convicted in Killing Orosi Teacher

12 hours ago

Thai Fighter Jet Bombs Cambodian Targets as Border Battle Escalates

12 hours ago

The Entz Era Begins at Fresno State With QB Job Up for Grabs

Fresno State’s first football practice of 2025 began with a flyover. While the military jet’s path may have been coincidental, t...

7 hours ago

7 hours ago

The Entz Era Begins at Fresno State With QB Job Up for Grabs

Miguel Lara, a Hoover High School soccer coach, was arrested Thursday for possessing child sexual abuse material, authorities said.
7 hours ago

Hoover High School Coach Arrested on Child Pornography Charges

7 hours ago

Hulk Hogan Is Gone, but Hulkamania Rolls On in Fresno and Around the Globe

9 hours ago

Fresno Brewery Teams With Japanese Sister City on Rice Lager Release

Jeffrey Epstein associate Ghislaine Maxwell stands at the podium to address Judge Alison Nathan during her sentencing in a courtroom sketch in New York City, U.S. June 28, 2022. (Reuters File)
9 hours ago

US Justice Department Official Meets Epstein Associate Maxwell

10 hours ago

Clovis Police Arrest Two in Mail Theft During Organized Retail Crime Detail

10 hours ago

California Political Lobbying Firm Agrees to Settle Federal Fraud Allegations

Lara Trump, daughter-in-law of U.S. President Donald Trump, looks on, before President Trump signs the "Genius Act", which will develop regulatory framework for stablecoin cryptocurrencies and expand oversight of the industry, at the White House in Washington, D.C., U.S., July 18, 2025. (Reuters File)
10 hours ago

Lara Trump Skips North Carolina US Senate Race, Clears Way for Cooper Versus Whatley

Help continue the work that gets you the news that matters most.

Search

Send this to a friend