Stocks Soar As Tense Election Draws To A Close
Stocks surged for a second consecutive day on Tuesday as investors bet wins by Democrats in elections would raise the chances for a comprehensive coronavirus relief package.
The Dow Jones Industrial Average rose 560 points, an increase of 2.1% as of midafternoon trading. It had risen 1.6% on Monday.
The broader S&P 500 index was up 1.7%.
Former Vice President Joe Biden was leading in most polls ahead of Tuesday's election, while Democrats are considered to have a competitive chance to retake the Senate, though the outcome for both is far from certain.
Victories in the White House and Senate would hand Democrats complete control of Washington, making it easier to pass legislation.
Investors typically dislike unified control of government, especially by Democrats, who have pushed for stronger regulation and higher taxes for the wealthy.
But the economy is stalling after a record-busting third-quarter, and investors believe strong action is needed to ease the impact from the pandemic.
"If we elect a divided government, the recovery is likely to proceed at a moderate pace. If one party sweeps, then we may get a more significant fiscal response, driven either by tax cuts or spending increases," said Steven Lipper, senior investment strategist at Royce Investment Partners.
Financial stocks such as Goldman Sachs and Citigroup were higher, as were airlines and energy shares, which have been hit especially hard by the pandemic.
While the stock market has done well under President Trump, the coronavirus has wreaked havoc on the economy, throwing millions of Americans out of work and closing hundreds of thousands of small businesses.
Stocks climbed to new highs over the summer, but prices began to retreat in early September. October was the worst month for the market since March.
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