(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
* S&P healthcare index jumps to record high
* Banks among rare decliners in afternoon trading
* Investors want decisive result and path to stimulus
(New throughout, updates prices, market activity and comments
to mid-afternoon; new byline, adds NEW YORK dateline)
By Chuck Mikolajczak
NEW YORK, Nov 4 (Reuters) - U.S. stocks surged on Wednesday
as the race for the White House remained undecided and the
likelihood of gridlock in Congress gave investors optimism that
major policy changes would be hard to enact.
Both President Donald Trump and Democratic nominee Joe Biden
still had paths to reach the 270 Electoral College votes needed
to win as states kept counting mail-in ballots. A surprise win by Republican Senator Susan Collins in Maine
also dimmed hopes by Democrats that they could get control of
the U.S. Senate.
"The divided congress means nothing major or extreme from a
policy standpoint is likely going to happen anytime soon, be it
increased taxes, more restrictive energy policy, more stimulus,
things like that look like they got pulled right off the table,"
said Shawn Cruz, Senior Market Strategist at TD Ameritrade in
Jersey City, New Jersey.
The Dow Jones Industrial Average .DJI rose 605.68 points,
or 2.2%, to 28,085.71, the S&P 500 .SPX gained 96.07 points,
or 2.85%, to 3,465.23 and the Nasdaq Composite .IXIC added
441.61 points, or 3.96%, to 11,602.18.
The S&P healthcare index .SPXHC jumped 5.20% to a record
high, while the information technology sector .SPLRCT rose
4.01%, as a divided Congress lowering the odds of higher
antitrust scrutiny, capital gains taxes and a restoration of
parts of the Affordable Care Act. The healthcare index was on
track for its biggest daily percentage gain in about five
months.
Still, with the rising possibility of a contested
presidential election, investors have said they favor a
definitive, swift resolution that would clear the way for a deal
on a stimulus package to help revive the economy.
The NYSE FANG+TM Index .NYFANG , which includes the core
FAANG stocks such as Apple AAPL.O and Amazon .AMZNO jumped
4.18%.
Shares of defense contractors Northrop Grumman NOC.N ,
Lockheed Martin LMT.N and Raytheon RTX.N all rose between on
receding chances of a cut in the defense budget.
Big Pharma Pfizer PFE.N , Merck & Co MRK.N and Johnson &
Johnson JNJ.N also jumped as the potential split Congress was
likely to shield the industry from sweeping reform. The NYSE
Arca pharmaceutical index .DRG shot up 5.52%.
CBOE volatility index .VIX , 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.
Despite the rally in stocks, the potential for political
uncertainty also 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 .SPXBK , which typically track Treasury
yields, slumped 2.58%. US/
Advancing issues outnumbered declining ones on the NYSE by a
1.70-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored advancers.
The S&P 500 posted 46 new 52-week highs and no new lows; the
Nasdaq Composite recorded 102 new highs and 20 new lows.
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S&P 500 in first terms: Trump vs Obama https://tmsnrt.rs/34Vuvjy
Markets under different presidents during history https://tmsnrt.rs/3p35jj4
Trump and the stock market https://tmsnrt.rs/31QeDN8
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