Markets sharply higher on election eve
STOCKS SURGED on yesterday on Wall Street, putting the market on course to snap a nine-day losing streak. Health care and financial stocks led the broad rally, as investors focused on the latest turns in the presidential race ahead of Election Day.
The Federal Bureau of Investigation announced on Sunday that its review of newly discovered Hillary Clinton emails found no evidence warranting charges. That appeared to ease the market’s anxiety, which ratcheted up in recent weeks over signs that the presidential race was tightening.
The Dow Jones industrial average gained 371 points, or 2.1 per cent, to 18,260. The Standard & Poor’s 500 index rose 46 points, or 2.2 per cent, to 2,131. The Nasdaq composite index added 119 points, or 2.4 per cent, to 5,166.
The S&P 500, a key market benchmark, is coming off its longest losing streak since 1980. It lost 66 points during the nine-day slide. So far, Markets surges after Democratic presidential candidate Hillary Clinton cleared for second time by the FBI on Sunday.
Monday’s gains have wiped out more than half of those losses. The S&P 500 was on track to notch its biggest singleday gain since March.
Clinton got a boost late Sunday, when FBI Director James Comey told lawmakers that a review of new Clinton emails did not change the bureau’s recommendation that she should not face charges. The market wilted on October 28 after the FBI notified Congress that it was reviewing newly discovered emails linked to Clinton, who is seen by Wall Street as likely to maintain the status quo. Donald Trump’s policies are less clear, and the uncertainty and uncomfortable closeness of the polls caused jitters in financial markets ahead of today’s general election.
“This is not a rational market. This is a reaction to less uncertainty,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. “In those kinds of markets, people are jumping into stocks that they think are cheap. And what are the cheapest right now? Financials and health care.”
The VIX, a measure of how much volatility investors expect to see in the market over the next 30 days, slumped 16.2 per cent Monday after surging 40 per cent last week to its highest level since June, when Britain voted to leave the European Union. The slide in the VIX reflected less anxiety among investors.
Safe haven investments also slumped as investors felt comfortable taking on more risk. Bond prices fell, driving the yield on the 10-year Treasury note up to 1.82 per cent from 1.78 per cent late Friday, while the price of gold fell US$22.60, or 1.7 per cent, to US$1,281.90 an ounce. Utilities and phone stocks, two other havens investors seek when they expect turmoil, lagged the market.
In the energy market, US benchmark crude oil was up 82 cents, or 1.9 per cent, at US$44.36 a barrel in New York at midafternoon. The price of oil is coming off a six-day losing streak. Brent crude, which is used to price international oils, was up 56 cents at US$46.14 a barrel in London.