Wall Street draws comfort from divided Congress, eyes move to Fed

By Medha Singh and Shivani Kumaresan (Reuters) - U.S.

Reuters November 06, 2020 00:06:07 IST
Wall Street draws comfort from divided Congress, eyes move to Fed

Wall Street draws comfort from divided Congress eyes move to Fed

By Medha Singh and Shivani Kumaresan

(Reuters) - U.S. stocks jumped on Thursday as bets on Republicans retaining control of the Senate eased worries of major policy changes that could hurt corporate America under a Joe Biden White House, even as the presidential election hung in balance.

With counting continuing in the battleground states still to be declared, investors were abandoning cautious positioning that many took ahead of the election, driving all of Wall Street's main indexes up by around 2%.

Analysts predicted the fraught nature of the vote would hamper any moves by Congress to deliver more fiscal stimulus amd put pressure on the U.S. Federal Reserve to nod to pumping more funds into the financial system, supporting more buying of stocks.

"Whoever emerges as President is unlikely to have a supportive Congress willing to write the President blank fiscal cheques," said Albert Edwards, global strategist at Societe Generale.

"That means only one thing: more Fed intervention to sustain markets."

The Fed is set to issue a statement later, after a two-day meeting delayed for the election, and is widely expected to repeat its pledge to do whatever it can to help an economy ravaged by the coronavirus crisis.

Biden was edging closer to victory on Thursday after winning Michigan and Wisconsin, but his Democratic party appeared unlikely to win the Senate, potentially making it difficult to tighten regulation on Big Tech and raise corporate taxes.

The tech-heavy Nasdaq, packed "stay-at-home" corporate winners under this year's lockdowns, gained 2.4% and was within striking distance of it Sept. 2 record closing high.

The Philadelphia SE semiconductor index surged 3.9% to hit its own all-time high, while technology and communication services led gainers among S&P indexes.

Buying was spread across sectors, however, and the VIX volatility index, which has risen in recent months as investors feared the vote might spark falls in shares, retreated to its lowest in three weeks.

At 12:12 p.m. EST the Dow Jones Industrial Average was up 1.76% at 28,336.67, and the S&P 500 1.99% at 3,512.06.

The materials index also hit a record high, boosted by a 6% rise in shares of U.S.-German industrial gas producer Linde.

Qualcomm Inc surged 13% after the chipmaker forecast fiscal first-quarter revenue above estimates as it predicted solid growth in 5G smart phones sales next year.

"Out of all the choices that could have happened this election season, this seems to be the one that the market is most okay with," said Kenny Polcari, Managing Partner at Kace Capital Advisors in Florida, also playing down any concerns over the growing list of legal challenges to the presidential vote.

"The Trump camp is going to come out and say that they are not at the moment accepting the result and that they are going to challenge it. But the market is not really concerned ... it is up by another 500 points."

(Reporting by Medha Singh and Shivani Kumaresan in Bengaluru; Additional reporting by Sagarika Jaisinghani and Susan Mathew; Editing by Patrick Graham, Bernard Orr and Anil D'Silva)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Facebook releases first data on hate speech prevalence on its platform
News & Analysis

Facebook releases first data on hate speech prevalence on its platform

By Elizabeth Culliford (Reuters) - Facebook Inc for the first time on Thursday disclosed numbers on the prevalence of hate speech on its platform, saying that out of every 10,000 content views in the third quarter, 10 to 11 included hate speech. The world's largest social media company, under scrutiny over its policing of abuses, particularly around November's U.S.

Santa, barred from malls and chimneys, enters homes via interactive video
News & Analysis

Santa, barred from malls and chimneys, enters homes via interactive video

(Reuters) - Santa cannot sit with kids in shopping malls this year, but they can still tell him their Christmas wishlist in a video chat at home.     Technology company Storyfile has come up with an artificial intelligence alternative to the holiday tradition: an interactive website where Father Christmas answers questions as if in person

Facebook estimates hate speech seen in 1 out of 1000 views on its platform
News & Analysis

Facebook estimates hate speech seen in 1 out of 1000 views on its platform

By Elizabeth Culliford (Reuters) - Facebook Inc for the first time on Thursday disclosed numbers on the prevalence of hate speech on its platform, saying that out of every 10,000 content views in the third quarter, 10 to 11 included hate speech. The world's largest social media company, under scrutiny over its policing of abuses, particularly around November's U.S.