Post by maruf on Nov 3, 2004 13:29:31 GMT -5
Stocks Surge; Bush Win Boosts Drugs, Oil
By Megan Davies
NEW YORK (Reuters) - U.S. stocks surged on Wednesday as President Bush (news - web sites) won re-election, boosting shares of companies in sectors seen benefiting from Republican administration policies, such as defense and drugs.
Democratic challenger John Kerry (news - web sites) conceded in an extraordinarily close presidential election, buoying Wall Street with the certainty that there would not be a repeat of the 2000 election fiasco.
"Investors are happy that Bush retained the White House. He's a known entity, and he's put through some favorable policies for investors. The expectations were that he'd win the White House," said Jon Brorson, managing director of growth equities at Neuberger Berman.
"We're seeing a knee-jerk reaction, though, so I wouldn't race in here. I think you could see the market coming down from its highs," Brorson said.
The Dow Jones industrial average (DJI - news) was up 137.84 points, or 1.37 percent, at 10,172.71. The Standard & Poor's 500 Index (SPX - news) was up 15.54 points, or 1.37 percent, at 1,146.10. The technology-laced Nasdaq Composite Index (^IXIC - news) was up 24.64 points, or 1.24 percent, at 2,009.32.
Stocks soared at the open, with the S&P hitting levels not seen since early April. Nasdaq hit its highest point since July 1, and the Dow was at its highest in nearly a month.
The Dow's gain of 1.7 percent matched its best one-day gain of the year, set in March.
By contrast, bond prices fell as investors abandoned Treasuries for stocks, traders said. The yield on the 10-year U.S. Treasury note was at 4.11 percent from 4.06 percent late on Tuesday.
With Bush seen as more pro-business than Kerry, Wall Street welcomed the prospect of the Republican administration remaining in place for four more years.
Shares of major U.S. drug and defense companies rose as a Bush win would mean a continuation of policies favorable to those sectors.
Drug company Pfizer Inc.'s (NYSEPFE - news) stock rose more than 4 percent to $29.93, lifting the S&P 500 index, while shares of defense contractor and commercial airplane maker Boeing Co. (NYSE:BA - news) rose 3.2 percent to $51.49, helping the Dow.
In another positive development for stocks, U.S. crude oil prices fell after U.S. weekly figures showed a rise in crude supply. Oil fell 20 cents to $49.42 after earlier hitting its lowest level since September.
However, stocks in oil-related firms rose. President Bush's policies are seen by energy analysts as doing more to help big oil companies. But some analysts also argue that a Republican administration could be more supportive of higher oil prices. Among oil stocks ahead was Exxon Mobil Corp (NYSE:XOM - news), up 1.6 percent to $49.21.
The election news eclipsed earnings results.
Time Warner Inc. (NYSE:TWX - news), the world's largest media company, reported a lower third-quarter profit, but its shares rose 1.8 percent to $16.57.
Meanwhile, a snap shot of the U.S. economy showed new orders at U.S. factories dropped unexpectedly in September, their biggest decline since April, on a big slide in orders for transportation equipment, government data showed.
A separate report showed that growth in the vast U.S. services sector expanded in October, with a slight rise in the employment index.