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| Stocks in US have biggest election day rally since '84 |
| Bloomberg / New York Nov 05, 2008, 00:08 IST |
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US stocks advanced in the biggest presidential election day rally in 24 years after MasterCard Inc and Archer Daniels Midland Co reported better-than- estimated earnings and money-market rates retreated.
MasterCard, the world’s second-biggest credit-card company, jumped 12 per cent after profit was boosted by higher overseas revenue and interbank lending rates retreated. ADM surged 15 per cent as rising commodity prices caused earnings to more than double at the world’s largest grain processor. General Electric Co added 8.3 per cent and CIT Group Inc climbed 30 per cent on a report that the Treasury may include financial companies other than banks and insurers in its $700 billion rescue programme.
“The market has come to the conclusion that Armageddon is off the table,” said Philip Orlando, who helps manage $330 billion as chief equity strategist at Federated Investors Inc in New York. “The elimination of the uncertainty of the campaign typically results in an end-of-year rally and you’re starting to see that today.”
Shares in Asia rose, led by financial companies, as Australias’s central bank cut interest rates more than economists expected.
Japan’s Nikkei 225 Stock Average gained 6.3 per cent as trading resumed following Monday's holiday. Mitsubishi UFJ Financial Group Inc and Westpac Banking Corp gained.during the quarter.
The Standard & Poor’s 500 Index added 35.52 points, or 3.7 per cent, to 1,001.82 at 11:29 am in New York, its first day above 1,000 since October 14. The Dow Jones Industrial Average rose 284.5 points, or 3.1 per cent, to 9,604.33.
The Nasdaq Composite Index advanced 49.26, or 2.9 per cent, to 1,775.59. Gains in Europe and Asia sent the MSCI World Index to a sixth straight advance.
Tuesday’s gains in the S&P 500 and Dow average were the biggest ever for a presidential Election Day. The NYSE first opened for trading during a presidential vote in 1984. The S&P 500 averaged a 0.3 per cent gain on those days since then.
‘Big Change’: The winner between Dem0unemployment in five years. “We keep getting reminded of how bad things are and how we need change, and I’m talking about from both candidates,” said Michael Holland, New York-based chairman of Holland & Co, which oversees more than $4 billion. “We’re moving forward now.”
Concern economic growth is slowing sent the S&P 500 down 17 per cent in October, the steepest monthly loss since 1987.
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