Wall Street surges on tech boost as presidential race remains undecided

By Medha Singh and Sagarika Jaisinghani (Reuters) - Technology stocks pushed Wall Street indexes sharply higher on Wednesday as an early vote count pointed to a close race for the White House, although investors remained worried about the prospect of a contested result. Both President Donald Trump and Democratic nominee Joe Biden still have possible paths to reach the 270 Electoral College votes needed to win as states keep counting mail-in ballots. Nine of the 11 major S&P indexes were up in morning trading, led by information technology and healthcare sectors, as investors said chances faded for Democrats to score a big win in the U.S.

Reuters November 05, 2020 00:06:23 IST
Wall Street surges on tech boost as presidential race remains undecided

Wall Street surges on tech boost as presidential race remains undecided

By Medha Singh and Sagarika Jaisinghani

(Reuters) - Technology stocks pushed Wall Street indexes sharply higher on Wednesday as an early vote count pointed to a close race for the White House, although investors remained worried about the prospect of a contested result.

Both President Donald Trump and Democratic nominee Joe Biden still have possible paths to reach the 270 Electoral College votes needed to win as states keep counting mail-in ballots.

Nine of the 11 major S&P indexes were up in morning trading, led by information technology and healthcare sectors, as investors said chances faded for Democrats to score a big win in the U.S. Senate, lowering bets of higher antitrust scrutiny and capital gains taxes.

"What's emerging for me is that not much is going to change as a result of this election, even if Biden wins," said Peter Kraus, a former Goldman Sachs executive who founded asset management firm Aperture Investments in 2018.

"The Senate is unlikely to flip. Stimulus bills, investments in infrastructure, significant fiscal spending and tax changes look in a rear view mirror."

Investors have said they favor a definitive, swift resolution to the election as that would clear the way for a deal on a stimulus package to help the damaged domestic economy. Analysts have also said the market will be comfortable with a clear Trump victory.

Meanwhile, Biden was back as clear favorite to win the election in online betting markets, according to data from three aggregators, after he overtook Trump in the state of Wisconsin.

"A lot of investors think (the election) will be wrapped up in a couple of days," said Arian Vojdani, investment strategist at MV Financial in Bethesda, Maryland.

"(But) increased uncertainties such as potential court cases around the election could throw a wrench in the current market optimism."

The NYSE FANG+TM Index, which includes the core FAANG stocks, jumped 3.6%.

However, some infrastructure, renewable energy and marijuana stocks, seen as likely winners from a Biden presidency, sank as much as 8%.

The CBOE volatility index, a gauge for short-term volatility, slipped to a two-week low after spiking to a four-month high in the run-up to the election.

Still, the prospect of political uncertainty sent investors to U.S. Treasuries, sparking the biggest one-day drop in 10- and 30-year bond yields since June. Shares of U.S. banks, which typically track Treasury yields, slipped 2%. [US/]

At 11:34 a.m. ET, the Dow Jones Industrial Average was up 619.01 points, or 2.25%, at 28,099.04, the S&P 500 was up 95.92 points, or 2.85%, at 3,465.08, and the Nasdaq Composite was up 435.13 points, or 3.90%, at 11,595.70.

Materials and financials were the only S&P indexes in the red.

Advancing issues outnumbered decliners 1.84-to-1 on the NYSE and 1.54-to-1 on the Nasdaq.

The S&P index recorded 42 new 52-week highs and no new low, while the Nasdaq recorded 82 new highs and 10 new lows.

(Reporting by Medha Singh and Sagarika Jaisinghani in Bengaluru; Additional reporting by Shivani Kumaresan; Editing by Saumyadeb Chakrabarty and Anil D'Silva)

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

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