Tech and health care lead U.S. stock surge

Tech and con­sumer and health care com­pa­nies soared as the in­dex closed at its high­est level in four weeks.

The Morning Journal (Lorain, OH) - - FRONT PAGE - By Mar­ley Jay

NEW YORK >> Stocks ral­lied Wed­nes­day as in­vestors were re­lieved to see that the U.S. midterm elec­tions went largely as they ex­pected they would. Big-name tech­nol­ogy and con­sumer and health care com­pa­nies soared as the S&P 500 in­dex closed at its high­est level in four weeks.

Democrats won con­trol of the House of Rep­re­sen­ta­tives while Repub­li­cans kept a ma­jor­ity in the Se­nate, as most polls had sug­gested. It’s not clear how the di­vided Congress will work with Repub­li­can Pres­i­dent Don­ald Trump, but if the pos­si­bil­i­ties for com­pro­mise and big agenda items seem lim­ited, Wall Street is fine with that be­cause it means pol­i­tics is that much less likely to crowd out the per­for­mance of the strong U.S. econ­omy.

“The mar­ket likes when what it ex­pects to hap­pen hap­pens,” said JJ Ki­na­han, chief mar­kets strate­gist for TD Amer­i­trade. “We haven’t had that hap­pen in a lit­tle while, when you think about ma­jor events like Brexit or the pres­i­den­tial elec­tion.”

The S&P 500 in­dex climbed 58.44 points, or 2.1 per­cent, to 2,813.89. The in­dex has risen six out of the last seven days to re­cover most of the losses it suf­fered in Oc­to­ber.

The Dow Jones In­dus­trial Av­er­age rose 545.29 points, or 2.1 per­cent, o 26,180.30. The Nas­daq com­pos­ite climbed 194.79 points, or 2.6 per­cent, to 7,570.75. The Rus­sell 2000 in­dex of small­er­com­pany stocks added 26.06 points, or 1.7 per­cent, to 1,582.16. Three-fourths of the stocks on the New York Stock Ex­change traded higher.

His­tor­i­cally mar­kets have per­formed well af­ter midterm elec­tions and with split con­trol of Congress.

Stocks are off to a strong start in Novem­ber, and the S&P 500 is up 3.8 per­cent so far this month. That fol­lows a swoon in Oc­to­ber that knocked the S&P 500 down nearly 7 per­cent as in­vestors wor­ried about ris­ing in­ter­est rates and the U.S.-China trade dis­pute.

High-growth stocks took an es­pe­cially bru­tal beat­ing last month. Quincy Krosby, chief mar­ket strate­gist at Pru­den­tial Fi­nan­cial, said it will be worth watch­ing to see if in­vestors are will­ing to buy those stocks again or if they con­tinue to pre­fer slower-grow­ing, more “de­fen­sive” com­pa­nies like util­i­ties and house­hold goods mak­ers.

On Wed­nes­day in­vestors bet on growth. Ama­zon jumped 6.9 per­cent to $1,755.49 and Mi­crosoft gained 3.9 per­cent to $111.96, while Google’s par­ent com­pany, Al­pha­bet, picked up 3.6 per­cent to $1,108.24.

Steady, “de­fen­sive” stocks lagged the rest of the stock mar­ket. Those com­pa­nies, which in­clude util­i­ties and house­hold goods mak­ers, tend to do well when stocks are in tur­moil, but they’re less ap­peal­ing when in­vestors are bet­ting on eco­nomic growth.

RICHARD DREW — THE AS­SO­CI­ATED PRESS

Spe­cial­ist Peter Mazza, left, works Wed­nes­day on the floor of the New York Stock Ex­change.

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