Stocks rally in wake of vot­ing

The Register Citizen (Torrington, CT) - - BUSINESS - BLOOMBERG

U.S. eq­ui­ties jumped as in­vestors moved past the hur­dle of un­cer­tainty pre­sented by the midterm elec­tions and em­braced an out­look for Wash­ing­ton grid­lock.

Riskier as­sets were in fa­vor af­ter Democrats won con­trol of the House of Rep­re­sen­ta­tives and Repub­li­cans held the Se­nate. The out­come dims chances that Don­ald Trump’s sig­na­ture tax cuts will be re­versed, but also makes less likely ma­jor fis­cal ini­tia­tives that might have pushed up in­ter­est rates. The dol­lar slid and Trea­suries climbed.

Tech stocks, which ab­sorbed the brunt of Oc­to­ber’s sell-off, led gains as the Nas­daq 100 surged more than 3 per­cent. Ama­zon.com and Net­flix were among the best per­form­ers. Health care shares ral­lied as in­vestors saw re­duced risk for ma­jor changes to the health sys­tem, while mar­i­juana stocks gained af­ter Michi­gan voted to per­mit recre­ational use and At­tor­ney Gen­eral Jeff Ses­sions — a critic of le­gal­iza­tion — re­signed. A gauge of volatil­ity ex­pec­ta­tions de­clined.

“We’ve got­ten the broad un­cer­tainty out of the way,” said Chad Mor­gan­lan­der, se­nior port­fo­lio man­ager at Wash­ing­ton Cross­ing Ad­vi­sors.

The out­come largely matched polling go­ing into the vote, and it’s likely in­vestors will now re­fo­cus their at­ten­tion on other is­sues. The big­gest macro theme re­mains the trade war af­ter re­cent warn­ings from ma­jor names in­clud­ing the IMF’s Chris­tine La­garde and for­mer U.S. Trea­sury Sec­re­tary Hank Paul­son. Mean­while, the Fed­eral Re­serve is set to de­cide in­ter­est rates Thurs­day, and Theresa May is push­ing on with ef­forts on a Brexit deal.

Else­where, Euro­pean stocks ral­lied and Asian shares were mixed. Shares of Span­ish banks surged af­ter they es­caped pay­ing bil­lions of eu­ros in back taxes. The euro ral­lied as data showed Ger­man in­dus­trial out­put picked up steam in Septem­ber.

The S&P 500 In­dex rose 2.1 per­cent as of the close of trad­ing in New York; the Nas­daq Com­pos­ite added 2.6 per­cent; the Dow Jones In­dus­trial Av­er­age rose 2.1 per­cent.

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