Stocks Get Election Boost; Financials Surge
Stocks staged an impressive Election Day rally as hopes for change lifted the market and Mastercard led gains by a raft of financial-related stocks.
Major averages shot out of the gate and held substantial gains throughout the morning, with metals stocks soaring and tech leaders advancing as well. The Dow Jones Industrial Averagewas up about 3 percent, while the Standard & Poor's 500 indexwas up more than 3.5 percent and the Nasdaqtrailed with a gain just shy of 3 percent.
Streams of voters hit the polls early as the historic race between Democrat Barack Obama and Republican John McCain has invigorated the voting public in ways this nation hasn't seen in years. Obama voted early in his Chicago precinct and there was some talk on the trading floor of an "Obama bounce" as trading began and alternative energy stocks surged.
In the financial sector, MasterCard shares spiked after the the credit-card provider delivered earnings that beat forecasts. Competitor Visa's shares came along for the ride.
CNBC.com parent General Electric led the Dow industrials as all but one of the 30 stocks on the blue-chip index were positive. GE got a boost from a Wall Street Journal report indicating that the Treasury Department is considering using more of its $700 billion rescue package to buy stakes in a wide range of financial companies, such as GE's GE Capital unit.
U.S. stocks had little reaction to a report showing factory orders fell 2.5 percent in September, more than the 1.9-percent drop expected.
Stocks rallied around the worldamid relief that U.S. election day is finally here and as Australia cut a key interest rate by a bigger-than-expected three-quarters of a percentage point, boosting hope that more aggressive moves are being taken to stem the global economic slowdown.
In technology news, Google and Yahoohaven't given up on an ad-sales deal, submitting a revised deal proposal to the Justice Department.
Traders were embracing the news, sending shares of both companies up.
But UBS slid after the bank confirmed its third-quarter profit outlook but warned that the fourth quarter would be difficult and 3,000 jobs likely would be cut.
The market also was reacting positively to continued loosening of credit, as bank lending rates again fell. The London Interbank Offering Rate, or Libor, or Libor, fell to 0.38 on the overnight rate and 2.7 percent for 3-month lending.
Ahares of agricultural giant Archer Daniels Midland soared after the company reported sharply higher quarterly profit that was helped by higher selling prices and an accounting change.
Net income jumped to $1.05 billion, or $1.63 per share, in the first quarter ended Sept. 30 from $441 million, or 68 cents per share, a year earlier for the ethanol producer and food processor.
Analysts on average were expecting earnings of 69 cents per share, excluding items, according to Reuters Estimates.
Health-care company Cigna was among the big drags on the S&P 500 after a downgrade Monday by Moody's.
TUESDAY: Election Day; Dallas Fed president speaks
WEDNESDAY: Weekly mortgage applications; ADP employment report; ISM services report; weekly crude inventories; Earnings from Time Warner, Cisco and News Corp
THURSDAY: Monthly chain-store sales; weekly jobless claims; BOE, ECB announcements; Earnings from Anheuser-Busch
FRIDAY: Jobs report; pending-home sales; wholesale trade; consumer credit; Earnings from Ford, Sprint Nextel and Berkshire Hathaway
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