Ethanol producers and health-care service providers are among the potential corporate beneficiaries of policies proposed by President Bush, while domestic automakers and oil companies could get slightly stung.
Ethanol companies' stocks fell Wednesday afternoon, however, signaling investors' skepticism about whether the proposals laid out in the State of the Union address are achievable politically, and even technologically. Economists said they expect few drastic changes in the Democrat-controlled Congress between now and the 2008 election.
"The business community is quite skeptical that much, if anything, will be produced out of the Congress in the run-up to the 2008 presidential election year," said Allen Sinai, chief global economist at Decision Economics.
The president's domestic moves toward bipartisanship are "marginally positive for stocks, but the proof is in the pudding and there's a long way to go," Sinai said.
Bush's proposals on energy and health care, including a call for a tax deduction of $7,500 for individuals and $15,000 for families regardless of wether they buy their own health insurance or receive medical coverage at work, were not overly ambitious, Sinai said.
Ethanol Producers May Benefit
But Archer-Daniels-Midland, along with US BioEnergy, VeraSun Energy and other ethanol producers nevertheless stand to benefit from Bush's all to raise consumption targets for ethanol and other alternative fuels to 35 bllion gallons by 2017. More than five billion gallons were produced in the U.S. in 2006. The long-term technological challenge, experts say, will be finding inexpensive ways to use feedstocks other than corn to meet the higher targets.