Market Advances as Nation Eyes Election
- Nov 04, 2008
At long last, election day is upon us. Or rather, it’s the last day people in many states can vote, since so many have done so already. What will it bring to the financial markets? If nothing else, an end to some bedeviling uncertainty about who will occupy the White House come January, and whether the Democratic Party will actually have a filibuster-proof majority in the U.S. Senate. The Financial News interviewed a number of economists this morning to see what the impact of a change in presidents might be on the economy. One of them, Keith Hembre, chief economist with First American Funds in Minneapolis, summed up why a good many people are in fact glad they won’t be stuck with the president’s job come January 20: “I’m not sure if either one of them could get us back on track anytime soon,” he said. Still, seemingly optimistic investors were in a buying mood today, with the Dow Jones index ending the day up 305.45 points, or 3.28 percent, and the S&P 500 and Nasdaq similarly up (4.08 percent and 3.12 percent, respectively). Maybe that’s a comment on how relieved investors are, now that the thing is almost over. Or maybe that’s just some ordinary bounce. Or it could be bargain-hunting. In any case, it was the largest Election Day rally since the day became an ordinary trading day in 1984. Other parts of the economy aren’t feeling so optimistic. According to the U.S. Commerce Department, factory orders were down 2.5 percent in September–not as bad as in August (down 4.3 percent), but bad enough. Enough to surprise the economists who were predicting a fall of 0.8 percent. Orders for durable goods in September were up slightly (0.9 percent), but the drop in bookings for non-durable goods, which were down 5.5 percent, more than offset that small rise. Car salespeople, in particular, have that forlorn Maytag repairman feeling, as sales of cars and trucks fell through the floor in October. Today GM reported a drop of 45 percent from the same month last year. GM has been begging for some $10 billion in bailout money for itself lately, and so it can buy Chrysler, but nothing is final yet–any decision seems to be awaiting the outcome of the election today.