Stocks rise on possible Bush victory

Wall Street welcomes Bush's lead as he is seen as more pro-business than Democratic challenger Sen. John Kerry.

Reuters

Dec. 3, 2004 8:00 a.m. PT

2 min read

U.S. stocks surged on Wednesday as investors bet that President Bush has won re-election, even though Ohio voting results were in dispute.

Wall Street welcomed Bush's lead as he is seen as more pro-business than Democratic challenger Sen. John Kerry. Investors seemed confident that the verdict would become clear on Wednesday and were reassured by the prospect of continuity offered by another four-year Bush term.

Shares of major U.S. drug and defense companies rose as a Bush win would mean a continuation of policies favorable to those sectors.

Other stocks seen as helped by a Bush presidency rose. Oil services and engineering company Halliburton was up 3 percent in morning trading, while Sinclair Broadcast Group, which had considered running an anti-Kerry television documentary, rose 4 percent.

The Dow Jones industrial average was up 1.35 percent, at 10,171.05. The Standard & Poor's 500 Index was up 1.24 percent, at 1,144.6. The technology-laced Nasdaq Composite Index was up 1.24 percent, at 2,010.05.

The S&P was at levels not seen since early April, while Nasdaq was at its highest since July 1, and the Dow was at its highest in nearly a month.

The Dow's earlier gain of 1.7 percent matched its best one-day gain of the year, set back in March.

Market breadth was overwhelmingly positive, with more than six stocks up for every one down on the New York Stock Exchange. On the Nasdaq advancers beat decliners by 5 to 1.

"With Bush looking like the winner, the market has taken this as politically positive news. The Republican majority in the House and Senate is also good news for business," said Subodh Kumar, chief investment strategist at CIBC World Markets. "The market is primed to move higher. This rally could be long lived."

Despite a Bush lead, the presidential race was not finally settled. Questions over provisional ballots in Ohio have kept Kerry in the race. Four years ago, election results took a month to sort out and that uncertainty led to a sell-off in the stock market.

The election overshadowed a busy day for earnings.

Time Warner, the world's largest media company, reported a lower third-quarter profit as it established a $500 million legal reserve and said it will restate results for its AOL Europe unit prior to 2002. Internet conglomerate IAC/InterActiveCorp, which owns the Expedia Web site, posted a sharp rise in third-quarter earnings, saying it gave up some potential travel business to boost the bottom line.

Higher oil prices were also eclipsed by the U.S. election.

U.S. crude oil prices rose and for a time were above $50 a barrel as signs of a Bush win raised the prospect of continued high U.S. demand and Middle East supply anxiety, dealers said. U.S. light sweet crude was up 11 cents to $49.73 in electronic trading.