Home Business Dow Jones jumps more than 260 points after U.S. midterm elections

Dow Jones jumps more than 260 points after U.S. midterm elections

by sanmigueltimes
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According to cnbc.com, U.S. stocks rose broadly on Wednesday November 7th, after the midterm election results came in about as expected, lifting a cloud of uncertainty that was weighing on the market.

Democrats won back the House of Representatives while Republicans retained control of the Senate, as the midterm’s outcome split Congress. Investors were bullish following the result due to the belief that gridlock in Washington will help the market. Investors expect President Donald Trump’s business-friendly policies to continue, while some expressed optimism about Congress providing a larger check on Trump’s more disruptive market actions. Historically, equity markets see strong returns when Congress is divided.

Dan Deming, managing director at KKM Financial, said the fact the election played out as expected “gives the administration some ability to keep initiatives alive. I think it will be positive in the near term.”

The Dow Jones Industrial Average rose 266 points, led by UnitedHealth and Microsoft. The Dow was up 3.7 percent for the year through Tuesday after an October sell-off leading up the election cut into its returns.

The S&P 500 gained 1.3 percent as the health care and tech sectors both rallied at least 2 percent. The Nasdaq Composite rose more than 1.7 percent. Relief that Republicans held onto the Senate also helped boost stocks, as some investors feared a so-called blue wave clamping down on Trump’s agenda.

Democrats will win the House. Here's how it could impact Trump's economy

Democrats win the House.

“The mid-terms are behind us, and the market now faces its own big test,” said Frank Cappelleri, executive director at Instinet. “Another strong showing today would unleash some bullish technicals. … While we can’t deny this, a straight shot back to the highs still seems unlikely, as volatility historically persists for longer than a few weeks.”

Stocks rallied across multiple sectors, as shares of Caterpillar, Goldman Sachs, Amazon and Alphabet all rose. Caterpillar is seen getting a boost from continued economic growth and the chance that Democrats can temper Trump’s trade war dealings. There’s also some optimism the president will work with Democrats on an infrastructure plan.

Click here for full article on cnbc.com

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