Stocks Rise Tuesday as Investors Hope for GOP Election Sweep

AP ^ | 11/5/02 | By Amy Baldwin

[witnesstothefall]

NEW YORK - Investors expecting a big Republican Election Day victory celebrated in advance with a buying spree Tuesday, giving the Dow Jones industrials a triple-digit gain and lifting technology stocks out of a slump. The Dow and Standard & Poor's 500 index locked in a three-day winning streak, while the Nasdaq composite index had its fifth straight gain.

Analysts attributed Tuesday's advance, which gained momentum in the last hour, to investors anticipating a GOP-controlled Congress as well as another interest rate cut from the Federal Reserve, which meets Wednesday.

"If we get a sweep by the Republicans, that raises a lot of hope as far as tax incentives going forward. This market has a sense that the Republicans are going to recapture the Senate," said Peter Cardillo, president and chief strategist of Global Partners Securities.

The Dow ended a lightly traded session up 106.67, or 1.2 percent, at 8,678.27. In the past three sessions, the Dow has climbed 281.24.

The broader market also rallied. The Nasdaq composite index rose 4.63, or 0.3 percent, to 1,401.17, having fallen as much as 17 earlier. The Nasdaq has a five-day gain of 100.63.

The Standard & Poor's 500 index advanced 7.04, or 0.8 percent, to 915.39, for a three-day gain of 29.63.

There was no earnings or economic news to sway trading Tuesday, which is typical for an Election Day. But after four straight weeks of gains from better-than-expected third-quarter earnings and a technology rally on Monday, many investors believe that the bear market is nearly over and that now is a good time to buy stocks again.

"You are hard pressed to sell into these kind of moves," said Bryan Piskorowski, market commentator for Prudential Securities.

The midterm election has contributed to the recent rallies. Investors have been hoping that Republicans would maintain control of the House as well as win the Senate.

Anticipation of Wednesday's Federal Reserve meeting has also provided some lift. The market was expecting that the central bank would cut rates again, probably by 0.25 percentage point, to reinvigorate the economy. The Fed cut rates 11 times last year.

Among blue chips, Boeing rose $1.85 to $31.52, Johnson & Johnson climbed $1.18 to $59.89, and Philip Morris advanced 94 cents to $42.68.

Cisco Systems rose 38 cents to $12.69 ahead of its earnings results due out Wednesday.

But software maker Adobe Systems dropped $1.56 to $25.82 after Deutsche Securities downgraded to "sell" from "hold."

Advancing issues narrowly outnumbered decliners 14 to 13 on the New York Stock Exchange. Consolidated volume was light at 1.67 billion shares, below Monday's 2.07 billion.

The Russell 2000 index, which tracks smaller company stocks, fell 0.90, or 0.2 percent, to 386.07.

Overseas, Japan's Nikkei stock average finished Tuesday up 2.9 percent. In Europe, France's CAC-40 gained 0.9 percent, Britain's FTSE 100 rose 0.1 percent, and Germany's DAX index advanced 0.7 percent.

[witnesstothefall]

This post is dedicated to the socialist Democrats who campaigned on the economy. A rising tide lifts all boats, hehehe.

[tomahawk]

God I love capitalism and free markets.

[Asclepius]

Investors have been hoping that Republicans would maintain control of the House as well as win the Senate.

I hope these investors took the time to vote between their trades and their vodka gimlets and their crime fighting and their instant messaging and their downloading of internet porn and their experimenting with their sexual identities in gay bath-houses and their software pirating and their long, searching glances into each others' eyes etc.

Otherwise, well, you know--life as we know we know it could be hanging by a slender thread above the yawning abyss of non-entity. Just like in my dreams.

[Linda]

You certainly do have a way with words.......: )

[goldstategop]

We can call a Republican takeover of the Senate a cinch. Here's why. Exit polls are garbage but when people play with real life money, you know exactly which way the weatherman is pointing. And you don't need Bob Dylan to tell you which way the wind is blowing now... ;-)

[witnesstothefall]

Are you describing investors or traders? You draw an extreme caricature in any sense. If that is due to losses in the markets, hey, look on the bright side. You could be Bill Gates and have to ponder 30 billions in losses. :()

[Doe Eyes]

Typical liberal bias of the Associated Press.

[unionman]

Actually, a rise in the markets would signal a Democratic victory, since returns have historically been higher under a Dem. You can look it up. http://www.amarillonet.com/stories/090100/bus_thestock.shtml

(there's a lot more sources, somehow I thought being out of the Amarillo paper would give it more credibility here).

[goldstategop]

Yeah and if investors made a wrong bet on Trent Lott being in charge, they stand to lose millions.

[Dallas]

Wow...You put everything that needed to be said into one sentence.....I'm impressed.

[Stallone]

Ridiculous.

Stock market gains that the SinkEmperor is only too shameless to claim credit for, are entirely due to the Republican Congress.

A Republican Congress is a prerequisite for a strong American economy.

Now go punch your clock, unionman.

[cmsgop]

Nah....These are different Times Big Shareholders want to see a Bump and they want to see it now. All that Crap is out the window.

[unionman]

I'm not talking about the 90's, go back 100 years. Returns are higher under Dems. Now if you can find some information that disproves that, by all means post it.

So the gains of the 90's were all due to the Republicans, but the current decline is because of Clinton? Am I understanding this correctly?

[templar]

... look on the bright side. You could be Bill Gates and have to ponder 30 billions in losses. :()

Well ... from my perspective ... being in a position that I could suffer 30 billion in losses would be the bright side.

[WOSG]

You are making a classic mistake that someone who doesnt understand the stock market might make.

A correlation can be due to independent or dependent variables, ie, coincident events or real causation. You need to distinguish the two! The largest coincident event in the last 100 years for the market was the bear market crash from 1929 to 1932, and the following great depression. second biggest had to do with inflation in the 60s and 70s. In both cases, the stock market favored democrat periods of control, but it did *NOT* imply the markets "liked" Democrat policies.

Likewise, we had a bubble under Clinton, when in fact that was Y2K liquidity pumping, and a bear market that started in March 2000, BUT ENDED ONLY LAST MONTH, it makes the "democrats" look "better", but the policy implications favor the Republicans.

Stocks declined after Jeffords' switched over, they are gong up now. The market knows that over time, the GOP will reduce tax rates and favor economic growth policies, and that will lift capital asset valuations.

[Lee_Atwater]

Between 1995 and 1998, President Clinton's economic policies were what one would call "supply-side". This aided equities. (Credit Clinton)

After 1998 surplus tax money was kept in unproductive government coffers (among other fiscal and central bank errors). This harmed equities. (Fault Clinton)

[StopDemocratsDotCom]