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This isn't anti-Democratic, it's anti-incertainty, which business and money-grubbers detest.
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Stocks seen off sharply on Democratic House win By Ellis Mnyandu
21 minutes ago
U.S. stock futures pointed to a sharp sell-off on Wall Street on Wednesday after Democrats swept Republicans from power in the U.S. House of Representatives and an undecided Senate race fueled caution.
With control of the U.S. Senate likely to hinge on a ballot recount that could take weeks, analysts said investors would be pressed to sell stocks following a strong run-up made in anticipation of gridlock within Congress rather than the wider sweep garnered by the Democrats, who must now work with a Republican-controlled White House.
"Not only is the market going to be taken by surprise on the outcome, but the uncertainty about the Senate race could create even more volatility," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
A potential recount and possible legal challenges in Virginia could delay the final result, dredging up memories of the 2000 presidential election recount that lasted five weeks.
"Given the state of the overbought condition of the market here, the market could take these results as an excuse to really sell off sharply here. Things could get a little ugly in ways we didn't expect or foresee," Mendelsohn added.
Virginia Democrat James Webb had an 8,000-vote advantage over Republican Sen. George Allen (news, bio, voting record) out of more than 2 million cast. A recount could stretch into December, leaving Senate control uncertain.
S&P 500 futures were down 5.4 points, below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures dropped 34 points and Nasdaq 100 futures fell 6 points.
Analysts said sectors likely to be under pressure from a Democratic sweep include defense, tobacco, major pharmaceutical and oil companies.
Shares of Pfizer Inc. (NYSE:PFE - news) were down 2.2 percent at $26.70 in electronic trade, while Merck & Co (NYSE:MRK - news) slid 2.3 percent in Europe.
On the other hand, a Democratic majority in either house of Congress would likely derail legislation aimed at reining in mortgage finance companies Fannie Mae (NYSE:FNM - news) and Freddie Mac (NYSE:FRE - news), which Democrats see as crucial in making home homeownership affordable.
A Democratic victory is also seen positive for alternative energy producers such as VeraSun Energy Corp. (NYSE:VSE - news), generic drug makers such as Barr Pharmaceuticals Inc. (NYSE:BRL - news) and stem cell research companies.
U.S. stocks rallied for two days before the election, with the Dow Jones industrial average (^DJI - news) on Tuesday reaching an all-time high of 12,196.32 and the Nasdaq Composite (^IXIC - news) rising as high as 2,391.34, its highest since February 2001.
Stocks to watch include Sirius Satellite Radio Inc. (Nasdaq:SIRI - news), whose stock rose 1.4 percent to $4.15 before the bell after the company reported a smaller third-quarter net loss.
Hovnanian Enterprises Inc. (NYSE:HOV - news) after the homebuilder forecast late on Tuesday it would report a fourth-quarter net loss and 2006 profit at the lower end of its prior outlook, citing land-related charges.
National Semiconductor Corp. (NYSE:NSM - news), a maker of analog and power management chips, cut its second quarter revenue forecast after the bell on Tuesday, citing weaker-than-expected demand from mobile telephone makers.
This isn't anti-Democratic, it's anti-incertainty, which business and money-grubbers detest.
Flashback to Bush41 saying Clinton winning will send the stock market plummetting...the rest is history.
Stock Market will be just fine.
Lessee ... Dow -2.56, NASDAQ +1.00. I guess that's "down sharply" if you're a writer who bet on the Republicans to retain control of the House.
Good thing about losing to Perry yesterday ... more time for Spurstalk. hehe
This bothers even me. The stock market is just that, a market. Of course it's going to drop when a new party takes over congress, that's how that works. It will come back up again, just like it did after 9/11, Enron, Worldcom, and now this.
The media puts too much emphasis on the market. The only way it would be newsworthy is if we went into another depression and/or energy crisis.
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