Wednesday, Nov 25th 2020 10:37 PM
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Market Digest Nigeria

Finance

U.S. stock market gaining points

The major stock indexes in the United States opened higher yesterday and kept on ralllying after a long election night produced no clear winner in an historic presidential race.

With votes still being counted in six key battleground states, the Dow Jones Industrial Average vaulted more than 250 points at the open of trading on Wall Street and kept building on those gains.

Around noon in New York, the thirty-share index was up more than 720 points or 2.62 percent at 28,200.13

The S&P 500 – a gauge for the health of US retirement and college savings reports – was up 3.16 percent while the tech-heavy Nasdaq Composite Index surged 4.23 percent as investors piled into tech shares – which have been outsized winners this year.

Wall Street’s main stock indexes finished higher on Tuesday on hopes that a clear winner would emerge from the US presidential race.

Polls showed President Donald Trump’s Democratic challenger Joe Biden had a substantial lead going into Tuesday’s vote, but as the night wore on it became evident that the race had significantly tightened in key swing states.

The race now hinges on vote counts in Arizona, Georgia, Pennsylvania, Wisconsin, Michigan, and Nevada.

The spectre of a contested election intensified after President Trump tweeted: “We are up BIG, they are trying to STEAL the Election. We will never let them do it. Votes cannot be cast after the polls are closed!”

“The results are not yet clear, but so far President Trump has outperformed polls in most states,” Alec Phillips, a Goldman Sachs analyst said in a Wednesday morning note.

A Democratic majority in the Senate looks less likely as well, he added.

“For fiscal policy, Senate control is at least as important as the White House. Under a narrow Republican Senate majority, we would expect no major tax increases but also a fiscal stimulus package of less than $1 trillion,” Phillips said.

Robard Williams, senior vice president at Moody’s Investor Services, expressed confidence even a contested vote count would not inflict long-term damage on U.S. credit markets.

“While the lack of an immediate conclusion to the election process may increase financial market volatility, our assumption is that U.S. institutions will eventually resolve the delays in vote counting and any subsequent disputes over the results in a manner that is consistent with the established frameworks around the rule of law without causing any meaningful, enduring credit impact,” he wrote.

A blow to gig economy workers turned into a big win for Uber and Lyft after Californians overwhelmingly voted in favour of a ballot measure exempting app-based ride-hailing and delivery services from classifying drivers as employees eligible for benefits and job protections.

The win enables Uber and Lyft to preserve their business model that relies on keeping drivers classified as independent contractors.

Shares of Uber were up 14.59 percent around noon in New York, while shares of Lyft were up 12.37 percent.

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