Skip Navigation Links
SEARCH  



 
Bookmark and Share
The Dow jumps more than 500 points after Democrats take House and Republicans strengthen Senate majority

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., January 12, 2018.  REUTERS/Lucas Jackson

  • Stocks rose Wednesday after the 2018 midterm elections.
  • Democrats captured control of the House while Republicans expanded their Senate majority.
  • Follow US stocks in real time here.

Stocks rallied Wednesday following the 2018 midterm elections that shifted the balance of power in Washington, with Wall Street preparing for the possibility of legislative obstacles within a divided Congress.

The Dow Jones Industrial Average jumped 2.12%, or more than 500 points, and the Nasdaq Composite surged 2.64%. The S&P 500 was up 2.11%. Democrats took control of the House early Wednesday morning, while Republicans expanded their majority in the Senate.

"In other words, certainty ruled the day," said Paul Eitelman, a strategist at Russell Investments. "Had the unlikelier scenario of a Democratic takeover of both the House and the Senate won out, we think markets likely would have moved in more significant fashion in the days ahead."

Shares of medical companies jumped, with the S&P 500 health care index up 2.93%. A repeal of the Affordable Care Act or other measures that could reduce medical costs aren't likely following the election results.

On top of that, three states passed measures to expand Medicaid programs. Health insurers rose to record highs, with Humana gaining 6.62% and UnitedHealth Group rising 4.17%. DaVita surged nearly 13% after California rejected a cap on dialysis revenue.

Cannabis stocks extended gains after Attorney General Jeff Sessions, who opposes marijuana legalization, announced he was resigning at the request of President Donald Trump. Many anticipated his departure was imminent following months of tension between the two. Matthew Whitaker, Sessions’ chief of staff, is expected to take over the post until a permanent replacement is nominated.

Tilray shares skyrocketed more than 30%, and Aphria gained 4.14%. The marijuana sector had already been climbing Wednesday after Michigan legalized recreational use of the drug, marking the first Midwestern state to do so. Utah and Missouri, meanwhile, passed legislation making marijuana legal for medical purposes.

Oil companies in Colorado rose after voters rejected a ballot measure that would have limited drilling and fracking in the state, particularly within the prolific Denver-Julesburg Basin. Shares of Anadarko Petroleum and Noble Energy both jumped around 5%.

With fewer near-term expansionary fiscal measures likely, according to analysts, the dollar fell against a basket of currencies. Treasury yields erased losses, with the 10-year rising to 3.223%.

Meanwhile, the Federal Reserve is expected to keep monetary policy steady at a meeting Thursday. The central bank increased its benchmark interest rate by 25 basis points to 2.25% in September, and has signaled the next hike could come in December.

Earnings season continued, with BMW reporting a 24% drop in net profits in the third quarter. 21st Century Fox posted a rise in profits, but disappointing sales. Disney, which on Tuesday received approval from European Union regulators to acquire the cable-network business, is scheduled to report on Thursday.

SEE ALSO: Former US Treasury secretary Hank Paulson warns of an 'economic iron curtain' if the US and China can't find a way to get along

Join the conversation about this story »

NOW WATCH: This mind-melting thought experiment of Einstein's reveals how to manipulate time



Full "The Business Insider: The Money Game" article




Disclaimer | Terms Of Use And Privacy Statement


© Metals News. All rights reserved.