NEW YORK: US stock indexes clung to small gains on Tuesday after losing ground in the late afternoon on investor jitters about making big bets as they awaited the outcome of US midterm congressional elections.
Financial markets were bracing for President Donald Trump’s Republican party losing control of the House of Representatives, while retaining the Senate.
Gridlock between the White House and Congress could hinder Trump’s pro-business agenda and raise concerns about political instability, but most analysts say this may not be the worst outcome for the stock market.
“The market backed off a little bit. It may be some concern as to the extent in which the Democrats take the House: how many seats versus what the expectation is,” said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York. “It’s a little bit of the market trying to hedge itself. Surprises, as we know, can always happen.”
At 2:43 p.m. (1943 GMT), the Dow Jones Industrial Average rose 57.07 points, or 0.22 percent, to 25,518.77, the S&P 500 gained 4.11 points, or 0.15 percent, to 2,742.42 and the Nasdaq Composite added 6.22 points, or 0.08 percent, to 7,335.07.
Some investors have said there could be a sharp selloff if the Democrats gain control of both the House and the Senate. In contrast, stocks may rally on hopes of more tax cuts if Republicans retain control of the House.
“The market’s wanting the election to be done so investors can assess the implications. We’re still within the rebound after the October decline. I don’t know if we’re out of the woods yet,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Ten of the 11 major S&P sectors showed gains, led by a 1.2 percent gain in the materials index, which was helped by earnings reports.
Shares of fertilizer company Mosaic Co rose 9.6 percent and building materials producer Martin Marietta Materials Inc gained 7.5 percent after strong results.
The trade-sensitive industrial sector pared earlier gains but was still up 0.8 percent.
Chinese Vice President Wang Qishan said Beijing was ready to hold discussions and work with the United States to resolve trade disputes.
The communications sector was the S&P’s weakest performer with a 0.1 percent decline. Its biggest drag was Netflix, which was down 2.7 percent.
Healthcare stocks got a boost from Mylan NV , which jumped 18.7 percent and pharmacy chain CVS Health Corp was up 4.9 percent after their results. Mylan’s shares rose after the generic drugmaker reported a bigger-than-expected third-quarter profit as it sold more products in emerging markets.
The health sector will be under the spotlight as Trump’s efforts to lower prescription drug prices could get more attention should Democrats gain control in Congress.
Advancing issues outnumbered declining ones on the NYSE by a 1.35-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored advancers.
The S&P 500 posted 17 new 52-week highs and one new low; the Nasdaq Composite recorded 42 new highs and 59 new lows.
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Source: Brecorder
