BUSINESS US stocks rise as Wall Street awaits election outcome

BUSINESS

US stocks rise as Wall Street awaits election outcome

Xinhua

08:16, November 05, 2020

NEW YORK, Nov. 4 (Xinhua) -- Wall Street's major averages climbed on Wednesday as investors await the outcome of the U.S. election.

The Dow Jones Industrial Average rose 367.63 points, or 1.34 percent, to finish at 27,847.66. The S&P 500 was up 74.28 points, or 2.20 percent, to 3,443.44. The Nasdaq Composite Index increased 430.21 points, or 3.85 percent, to 11,590.78.

Seven of the 11 primary S&P 500 sectors closed higher, with health care and communication services both up more than 4 percent, leading the gainers. Materials slipped 1.65 percent, the worst-performing group.

U.S.-listed Chinese companies traded higher, with all the top 10 stocks by weight in the S&P U.S. Listed China 50 index ending the day on an upbeat note.

The moves came despite uncertainty about the U.S. presidential election.

Market participants seemed concentrating on the battle for the Senate, where Republicans have fended off challenges in a number of key races, according to experts.

"My sense is traders and investors are increasingly comfortable Republicans will hold the Senate and Democrats will hold the House," Chris Low, chief economist at FHN Financial, said in a note Wednesday.

"From a markets standpoint, that means whoever emerges with White House control, Trump or Biden, will not be able to do much," as "disruptive changes in taxes and spending are unlikely," he added.

Wednesday's market rally followed a solid prior session that saw the Dow closing up more than 550 points.

Experts noted that volatility is likely to continue as markets remain sensitive to news.

"Markets process new information as it comes in and there will be more surprises and upsets before the dust settles," said Low.

"Even with election day behind us, I think we should reasonably expect volatility to continue over the next few weeks - which to me means the likelihood of investor missteps will also go up," said Mitch Zacks, CEO at Zacks Investment Management.

Wall Street also digested a slew of newly-released economic data.

U.S. Services PMI (Purchasing Managers' Index) registered 56.6 percent in October, 1.2 percentage points lower than the September reading of 57.8 percent, the Institute for Supply Management reported on Wednesday. The reading fell short of market estimates.

U.S. private sector employment increased by 365,000 jobs last month, reported payroll data company Automatic Data Processing (ADP) on Wednesday.

"The labor market continues to add jobs, yet at a slower pace," said Ahu Yildirmaz, vice president and cohead of the ADP Research Institute. "Although the pace is slower, we've seen employment gains across all industries and sizes."

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