US STOCKS-Wall St rallies on U.S. elections led by tech, health stocks
By Sinéad Carew
NEW YORK Nov 7 (Reuters) - U.S. stocks surged on Wednesday with broad gains led by the technology and healthcare sectors as investors, relieved to put midterm elections behind them, made bets that a divided Congress would be good for equities.
Democrats won control of the House of Representatives on Tuesday, while President Donald Trump's Republican party expanded its Senate majority, pointing to a political gridlock in Washington.
The S&P's biggest boosts came from the S&P technology sector , which rose 2.4 percent, and the healthcare index , which gained 2.8 percent as investors were more comfortable taking on risky bets. The consumer discretionary sector was also a strong gainer as Amazon.com soared.
"I don´t think any of Trump´s agenda that he´s already accomplished gets unwound. That was the main point of concern for investors," said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. "We´ve got a relief rally because the market got exactly what it expected."
At 2:53PM ET, the Dow Jones Industrial Average rose 444.78 points, or 1.74 percent, to 26,079.79, the S&P 500 gained 47.9 points, or 1.74 percent, to 2,803.35 and the Nasdaq Composite added 162.37 points, or 2.2 percent, to 7,538.34.
While a divided Congress will make it harder for Trump's administration to push through new legislation such as additional tax cuts, investors were not expecting a reversal of tax cuts and deregulation measures that have already been enacted.
Some strategists said Democratic control of the House means President Donald Trump would have a harder time gaining support for efforts to impose more regulations on Amazon.com, which rose 6 percent providing the S&P 500's biggest boost from a single stock.
But even as technology and healthcare stocks soared, investors questioned whether the sectors could now be more at risk of additional regulatory scrutiny.
Following a steep selloff in October, the S&P 500 was still roughly 5 percent below its record high reached in December, as investors still had their eyes on rising interest rates and a U.S.-China trade war.
The Federal Reserve began its two-day monetary policy meeting on Wednesday, but was not expected to raise rates until December.
Bank stocks were up but underperforming the broader market as Treasury yields slipped and investors bet that the divided Congress would hamstring any efforts for additional fiscal stimulus.
Health insurers Humana Inc, Anthem Inc and UnitedHealth Group Inc jumped to record highs as voters in three states approved expanding Medicaid programs for low-income people.
DaVita Inc jumped 10.9 percent after California rejected a proposal to limit the rates dialysis clinics can charge commercially insured patients.
Anadarko Petroleum Corp surged 5.8 percent and Noble Energy Inc jumped 5.2 percent after Colorado voters a rejected a tougher rule on oil and gas drilling, which spurred shares of companies operating in the state.
Among the laggards were luxury handbag maker Michael Kors Holding Ltd and beauty products maker Coty Inc , which tumbled 14.8 percent and 24.5 percent, respectively, after both missed quarterly revenue estimates.
Advancing issues outnumbered declining ones on the NYSE by a 3.07-to-1 ratio; on Nasdaq, a 1.90-to-1 ratio favored advancers.
The S&P 500 posted 34 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 61 new highs and 61 new lows.
(Reporting by Sruthi Shankar in Bengaluru, additional reporting by Medha Singh; Editing by Arun Koyyur and Cynthia Osterman)
