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Stocks Rally on Bush Victory
Wall Street rallied today on the reelection of President Bush as investors overlooked a spike in crude oil futures and snapped up stocks of companies that might benefit from another four years of a Republican-controlled government.
The Dow Jones industrial averaged soared more than 100 points shortly after the opening bell and remained in triple-digit territory for much of the morning as Democratic Sen. John Kerry conceded the election to the Republican incumbent. However, the Dow retreated in afternoon trading, but remained up more than 80 points. The Nasdaq, S&P 500 and other major financial indexes were also higher.
The "Republican relief rally" on Wall Street was in sharp contrast to the financial markets' reserved mood in the days leading up to the election as investors mulled the outcome of an extremely close race. Many investors had grown concerned that a Kerry victory would mean the repeal of the Bush tax cuts and higher taxes on stock dividends.
Bush was "generally regarded as the more market friendly candidate, in large part because of his fiscal policies," said Patrick O'Hare, general market analyst, at Briefing.com, an investment advisory
Stocks surged even as crude oil futures on the New York Mercantile Exchange jumped more than a $1 a barrel to rise above the $50 level. The spurt in crude oil futures comes after a steep decline in recent days from record-high prices.
Shares of healthcare and pharmaceutical companies were much in demand as the prospect of tighter government regulations and the importation of cheaper prescription drugs from Canada — proposals favored by Kerry — were no longer seen as viable by investors. Energy and utility stocks also benefited today from Bush's victory.
"The healthcare sector was a clear winner today," O'Hare said.