US stocks rallied for a fourth consecutive day Thursday as Wall Street welcomed the likelihood of a gridlocked government with the presidential race still in flux.
The Dow Jones industrial average climbed 28,390.18 +542.52, points, or 2 percent, to close at 28,390.18, capping a nearly weeklong rally that erased the previous week’s 1,834-point loss as election officials continued to count votes in key states such as Georgia, Arizona and Pennsylvania.
The benchmark S&P 500 index climbed about 2 percent to build on Wednesday’s 2.2 percent gain, while big tech stocks once again helped the Nasdaq rip 2.6 percent higher.
With the presidential contest between Joe Biden and President Trump still to be decided, investors have cheered Republican victories helping the party maintain control of the Senate and keep Congress divided. That would make it tough for Biden to execute his agenda and diminish the possibility of sweeping changes to tax policy or regulations no matter who takes the White House.
“Even though we don’t know the winners, we have a relatively strong grasp on the likeliest byproduct of this election season: some degree of fiscal stimulus, no big changes to the tax code, and probably a renewed sense of structural stability,” said Isaac Boltansky, director of policy research for Compass Point Research & Trading.
Stocks that could benefit from a Biden victory, including renewable energy and marijuana companies, nevertheless posted early gains as the former vice president appeared to close in on a win, gaining votes in Pennsylvania and Georgia and keeping narrow leads in Arizona and Nevada.
Solar panel maker First Solar and clean-energy producer NextEra Energy rose as much as 11 percent and roughly 4 percent, respectively, while cannabis firms Tilray and Canopy Growth Corporation jumped as much as about 32 percent and 14 percent, respectively.
But a legal battle over the election’s outcome and protests from both sides of the race could inject a fresh dose of uncertainty into the markets. Trump urged officials to “STOP THE COUNT” on Twitter and his campaign has brought several lawsuits over the handling of votes, though suits in Michigan and Georgia were dismissed Thursday.
“Depending on how long the legal fight goes, investors may lose patience, especially if the protests continue and escalate,” Quincy Krosby, chief market strategist at Prudential Financial, told The Post.
“That said, we will have a president and it will either be Trump or Biden,” she added. “We know that the market is fine with those two configurations, especially Biden with a Republican senate.”
Thursday’s surge also came after the US reported more than 100,000 new coronavirus cases in a single day for the first time as the deadly pandemic continued to rage across the country.
Investors have been hoping for another stimulus bill to address COVID-19’s economic fallout as well as a vaccine to help end the crisis. Market analysts expect a spending package to arrive regardless of the outcome, and Senate Majority Leader Mitch McConnell said Wednesday that he wants to approve one by the end of the year.
With Post wires
Additional reporting by Thornton McEnery
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