U.S. stocks close higher as investors await election results
Investors remained in a buying mood on election day, sending U.S. stocks broadly higher and building on big gains from a day earlier.
Safe-play stocks such as utilities and phone companies were among the biggest gainers Tuesday. Energy companies were essentially flat.
Investors focused on the U.S. presidential election, which rattled financial markets in recent weeks as polls between Hillary Clinton and Donald Trump tightened.
Wall Street has largely seen Clinton as more likely to maintain the status quo, while viewing Trump’s policies as less clear. Tuesday’s rally, coupled with Monday’s market gains, which marked the end of a nine-day losing streak and the best day for stocks since March, suggest the market anticipated a Clinton win.
“The market has been looking for the status quo result, and the polling in the last couple of days shows that result is a good likelihood,” said Mike Baele, senior portfolio manager at the Private Client Reserve at U.S. Bank. “That’s the reason why the market is bouncing here.”
The Dow Jones industrial average rose 73.14 points, or 0.4%, to 18,332.74. The average was briefly up as much as 140 points. The Standard & Poor’s 500 index gained 8.04 points, or 0.4%, to 2,139.56. The Nasdaq composite index added 27.32 points, or 0.5%, to 5,193.49.
Trading got off to a downbeat start, weighed down by disappointing earnings from Valeant Pharmaceuticals, CVS Health and other companies. But the market recovered by midmorning as investors’ sized up news reports on early voting trends.
Investors have been expecting Clinton to win the presidency, the Democrats to take back the Senate and the Republicans to hold on to the House of Representatives, said Erik Davidson, chief investment officer for Wells Fargo Private Bank.
“That’s sort of the base case,” he said. “A Trump victory, the markets are not fully ready for that. That could certainly cause some volatility in the markets tomorrow if we have that outcome, and if it’s conclusive.”
Beyond the election, investors monitored the latest batch of company earnings.
Priceline Group climbed 6.6% after the online travel booking company reported quarterly earnings that easily beat analysts’ forecasts. The stock gained $97.80 to $1,578.13.
But Hertz plunged 22.5% after the car rental company’s latest quarterly earnings came up far short of what analysts anticipated. The stock, which was down more than 50% at one point, slid $8.04 to $27.70.
Benchmark U.S. crude rose 9 cents to close at $44.98 a barrel. Bond prices fell. The yield on the 10-year Treasury note rose to 1.86% from 1.83% late Monday.
UPDATES:
2:45 p.m.: This article was updated after the markets closed.
7:45 a.m.: This article has been updated with additional details on the financial markets.
This article was originally published at 6:50 a.m.
