Upgrade Now

US close: Stocks rally following outcome of mid-terms

By Iain Gilbert

Date: Wednesday 07 Nov 2018

US close: Stocks rally following outcome of mid-terms

(Sharecast News) - The Dow Jones closed over 500 points higher on Wednesday as US stocks surged after the outcome of the mid-term elections was revealed.
At the close, the Dow Jones was 2.13% higher at 26,180.30, while the S&P 500 closed 2.12% firmer at 2,813.89 and the Nasdaq was 2.64% stronger at 7,570.75.

Following the mid-term elections, which saw the Democrats take control of the House of Representatives while the Republicans tightened their grip on the Senate, the Dow Jones closed 544 points higher, marking the highest close for the blue-chip gauge since 9 October.

The S&P 500 also turned in its strongest performance in almost three weeks.

The result allowed both sides to claim a victory, as Donald Trump certainly did, but there was no doubt that his progress would be less assured for the remainder of the term as the Democrats seek to put the brakes on his agenda.

However, the failure to take the Senate, no matter how unlikely it was in statistical terms, meant that big business and the wealthy could rest easy over fears that handouts under Trump would be rolled back.

Oanda analyst Craig Erlam said: "The result leaves us with the prospect of political gridlock in Congress, something that is not as undesirable as you'd think. Much of Trump's pro-growth and pro-market agenda was passed in the first two years of his term so losing control of one isn't the end of the world.

"From a markets perspective, the most important thing is that the blue wave never fully materialised as this could have led to the scaling back of some of those market-friendly policies, including tax reform."

With the mid-terms over and done with, the focus will now shift to the Federal Reserve's two-day meeting that's set to wrap up on Thursday.

While the central bank isn't expected to make any moves on interest rates, traders will still be keeping their eyes peeled for any indications regarding the pace of future interest-rate hikes.

"I don't expect the Fed to do anything different this month and instead, for now, treat it as a blip in an otherwise strong market," said Erlam.

In corporate news, Michael Kors shares closed 14.62% lower after the fashion brand's quarterly sales missed analysts' estimates.

Humana picked up 6.62% throughout the session after the health insurer's third-quarter profit surpassed estimates and the company upped its full-year outlook.

Elsewhere, Office Depot soared 24% on Wednesday as its third-quarter profit and sales topped expectations and the company lifted its guidance.

Facebook shares edged up 1.06% despite chief executive Mark Zuckerberg facing growing demand to appear before the relevant committees of five parliaments for an international joint hearing on disinformation and "fake news".

..

Email this article to a friend

or share it with one of these popular networks:


Top of Page