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Wall Street rallies after election yields split Congress
NEW YORK, Nov 8, 2018 (BSS/AFP) – Wall Street soared Wednesday, a day
after hard-fought midterm elections resulted in a split Congress that
analysts say is likely to halt any major advances in President Trump’s
economic agenda.
Analysts said markets were breathing a sigh of relief now that the
uncertainty of the vote was behind them.
The benchmark Dow Jones Industrial Average got a 2.1 percent bump, closing
up more than 500 points at 26,180.30, the highest level since October 9.
The broader S&P 500 likewise rose 2.1 percent, to finish at 2,813.89,
while the tech-heavy Nasdaq gained 2.6 percent to 7,570.75.
With a handful of races still too close to call, Democrats were on track
to capture 30 or more seats, taking control of the House of Representatives
and providing a check on Trump’s policies starting in 2019.
But Republicans appeared likely to win three to five Senate seats and
solidify their control of the upper house following Tuesday vote.
Trump declared victory, but also said he could work with Democrats to get
legislation passed.
While a split Congress is unlikely to produce major new economic policy,
it also is unlikely to rollback business-friendly changes enacted since last
year.
“Now we can focus on the fundamentals, which are solid growth and strong
corporate earnings,” Alain Skrainka of Cornerstone Wealth Management told
AFP.
He said the health care sector likely had little to fear from a Democratic
House due to the expected partisan divide.
Democratic sweep of Congress would have been seen as a threat to Trump’s
agenda and providing momentum to calls for an impeachment investigation,
while a Republican sweep would have bolstered the odds for additional tax
cuts that could have worsened the US fiscal outlook, analysts said.
Wells Fargo said the bipartisan Congress means the odds of “significant,
market-moving legislation are minimal,” and won’t threaten the outlook for
continued solid economic growth and moderate inflation.
Drug company share prices closed largely higher, suggesting investors did
not see a threat to industry profits from Congress.
Tech shares also jumped. Amazon gained 6.9 percent while Google-parent
Alphabet rose 3.6 percent and Microsoft added 3.9 percent.
BSS/AFP/HR/0958