Unease on Wall Street as Election Day Nears
Does Wall Street like Bush or Kerry? Investors will be happy just to have a clear winner by the opening bell Wednesday, no matter who it is.
The stock market hates uncertainty, and a second presidential election decided by the courts could drive stocks lower for weeks -- possibly until someone is inaugurated Jan. 20. With the contest between President Bush and Sen. John F. Kerry apparently a dead heat and thousands of lawyers from both parties primed to pounce on the smallest improprieties, only a solid Tuesday-night showing by one of the candidates is likely to forestall a downturn in the markets Wednesday.
The biggest risk for investors is a repeat of the 2000 race, which wasn’t ultimately decided for more than a month because of legal wrangling over voting irregularities in Florida. The Standard & Poor’s 500 index fell more than 3% during that unsettled period.
“If we don’t have an immediate outcome, I think we’ll see a sell-off similar to four years ago,” said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum.
Regardless of the outcome, the election probably will overshadow a number of economic reports and earnings releases this week, including the jobs creation report for October and earnings from media giants Time Warner Inc. and News Corp.
Once the election dust really settles, investors will turn their attention from politics back to the basic menu of economic data and corporate earnings.
“After the elections, if we have a president, there will be more focus on the economic data,” said James Fisher, vice president and trust investment officer at Univest Corp. “Iraq, coupled with oil, will also be important. There is still a lot of unknown.”
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This Week’s Datebook
Today
* Institute for Supply Management issues its report on activity in the industrial economy in October.
* Commerce Department reports on personal income and spending and construction spending for September.
* Tyco International Ltd. releases fourth-quarter earnings.
Tuesday
* Third-quarter earnings due from Prudential Financial Inc. and Tenet Healthcare Corp.
* AmerisourceBergen Corp. releases fourth-quarter earnings.
Wednesday
* Commerce Department reports on factory orders for September.
* Major automakers announce sales figures for October.
* Third-quarter earnings expected from CVS Corp., Cigna Corp., Duke Energy Corp., Electronic Data Systems Corp. and Time Warner Inc.
* News Corp. releases first-quarter earnings.
Thursday
* Nation’s largest retailers announce sales figures for October.
* Labor Department reports on productivity and costs for the third quarter and on weekly unemployment claims.
* Freddie Mac reports on mortgage rates.
* Third-quarter earnings expected from Alcan Inc., Charter Communications, Qwest Communications International Inc., Teva Pharmaceutical Industries Ltd. and TRW Automotive Holdings Corp.
Friday
* Labor Department reports on employment for October.
* Federal Reserve reports on consumer credit for September.
