Wall Street to watch midterm election results
Investors will be looking to Washington in the coming week not for more of the economic numbers that have weighed so heavily on the markets in recent weeks but to determine whether the winners in Tuesday’s midterm elections will pursue an agenda that could affect business interests.
Although professional investors are often viewed as politically conservative, Wall Street likes what many voters hate: gridlock. The Street likes to mitigate as many risks as possible, so a moribund, non-activist government is often seen as easier for businesses to contend with.
Investors will be waiting to see whether Democrats will make inroads, as polls have suggested, and perhaps shift the balance of power in Washington and in state capitals.
Wall Street will have more time to focus on the elections because fewer economic and earnings numbers are expected this week than during the last month. A few big names such as Cisco Systems and Walt Disney are scheduled to report.
The lighter economic calendar will be viewed as good news by some wary investors. Much of the recent economic news unnerved investors hoping for signs of a gradual slowdown in the economy.
Many on Wall Street interpreted the severity of readings in areas such as productivity, manufacturing and economic growth as indicating the economy was slowing too quickly.
Stocks, which rose sharply in October as investors bet that the economy was poised to pull off a soft landing, lost ground last week as that notion frayed.
The Dow Jones industrial average ended the week down 0.9%, the Standard & Poor’s 500 index declined 1.0% and the Nasdaq composite index lost 0.8%.
However, despite the week’s losses, Friday brought a respite from the flow of negative economic news with a Labor Department report that the unemployment rate fell to its lowest level in five years.
This week, investors will be watching to see whether voters concerned about the wars in Iraq and Afghanistan as well as the economy will find some solace in the latest job figures and the strength the stock markets showed in October when they cast their vote.
While voters head to the polls Tuesday, Wall Street expects to receive the Federal Reserve’s September consumer credit report.
Wednesday brings a weekly reading of crude inventories; surprise readings in recent weeks have shifted oil prices. On Thursday, the Commerce Department’s report on import and export prices for October could give Wall Street insight on inflation.
From the Associated Press
The week ahead
Today
* Treasury bill auction.
* Internal Revenue Service Commissioner Mark Everson speaks at an accountants’ conference.
* Delegates from more than 150 nations meet in Nairobi, Kenya, for a two-week U.N. conference on climate change.
* Quarterly earnings reports due from Anadarko Petroleum, El Paso Corp., Liberty Media Holding, XM Satellite Radio Holdings.
Tuesday
* Election Day.
* Federal Reserve reports on consumer credit for September.
* Quarterly earnings reports due from EchoStar Communications, Nortel Networks, Revlon, R.R. Donnelley & Sons, Sara Lee, Tenet Healthcare.
Wednesday
* Quarterly earnings reports due from Cisco , DirecTV Group, Napster, Amerco, Cablevision Systems, Federated Department Stores, News Corp., Sirius Satellite Radio.
Thursday
* Commerce Department reports on international trade for September.
* Labor Department reports on weekly jobless claims.
* Freddie Mac reports on mortgage rates.
* Quarterly earnings reports due from Disney, Viacom, American International Group, HealthSouth, J.C. Penney, Kohl’s, TXU.
Friday
* Federal Reserve Chairman Ben S. Bernanke speaks at a conference on monetary policy in Frankfurt, Germany.
From Times Wire Services
