Wall Street ends higher as investors look at the US midterms

  • Take-Two, Lyft slumps on downbeat forecast
  • Amgen rides on cholesterol drug data
  • Indices: S&P 500 +0.56%, Nasdaq +0.49%, Dow +1.02%

Nov 8 (Reuters) – Wall Street finished higher on Tuesday amid voting in midterm elections that will determine control of the US Congress, with investors betting on a political stalemate that could prevent major policy changes.

This is the third straight day of gains in the US stock market, leaving the Dow Jones Industrial Average (.DJI) down less than 10% year-to-date.

Helping the Dow’s blue stock, drug maker Amgen Inc (AMGN.O) rallied almost 6% to a record high after the company reported positive data related to its cholesterol medicine and obesity treatment.

All 435 seats in the House of Representatives and some 35 seats in the Senate are on the ballot, and experts say there are days to wait before it is clear who will win certain races. Nonpartisan forecasts and polls suggest a strong chance for Republicans to win the House majority and a tight race for control of the Senate.

“On balance, the financial market is like a gridlock. To the extent that change will be slow and developing, a divided government certainly provides the backdrop,” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis.

A surprise victory for the Democrats, however, could raise concerns about regulation of the technology sector as well as budget spending that could add to already high inflation, according to market strategists.

Investors are also awaiting a key inflation reading due on Thursday, which is expected to show easing consumer prices and provide further clues about why the US Federal Reserve can soften its campaign of aggressive rate hikes.

Traders are divided on whether the Fed will raise rates by 50 basis points or 75 basis points at the central bank’s meeting in December, according to the CME Fedwatch tool.

Cryptocurrency related stocks include Coinbase Global (COIN.O) and Microstrategy (MSTR.O) tumbled after Crypto giant Binance signed a nonbinding agreement to buy FTX’s non-US rival unit to help cover a “liquidity crunch” in the cryptocurrency exchange.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2022. REUTERS/Brendan McDermid

“Some investors will shoot first and ask later, but the good thing is that crypto is kind of isolated. They are alone, they really are not part of the equity market,” said Joe Saluzzi, co-manager of trading at Themis. Trade in Chatham, New Jersey.

Every S&P 500 stock’s performance in 2022

S&P 500 (.SPX) rose about 7% from its October close, but remains down about 20% in 2022 on worries that the Fed’s aggressive rate hikes could cripple the US economy.

The S&P 500 rose 0.56% to end the session at 3,828.13 points.

The Nasdaq gained 0.49% to 10,616.20 points, while the Dow Jones Industrial Average rose 1.02% to 33,160.83 points.

Of the 11 S&P 500 sector indexes, 10 rose, led by materials (.SPLRCM)up 1.72%, followed by a gain of 0.92% in information technology (.SPLRCT).

Take-Two Interactive Software Inc (TTWO.O) slumped nearly 14% after the videogame publisher lowered its annual sales outlook, while ride-hailing firm Lyft Inc (LIFT.O) tumbled 23% after forecasting current-quarter revenue below Wall Street estimates.

Forward issues exceed the number of falls in the S&P 500 (.AD.SPX) by a ratio of 2.5-to-one.

S & P 500 posted 21 new highs and 9 new lows; Nasdaq recorded 97 new highs and 258 new lows.

The volume on the US exchanges was relatively light, with 11.7 billion shares traded, compared with an average of 11.8 billion shares over the previous 20 sessions.

Reporting by Noel Randewich in Oakland, California, and David Carnevali in New York Additional reporting by Amruta Khandekar, Sruthi Shankar, Devik Jain and Shubham Batra in Bengaluru Editing by Maju Samuel and Matthew Lewis

Our standards: Thomson Reuters Trust Principles.

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