Wall Street rose 2 percent on Wednesday, led by the technology and healthcare sectors as investors breathed a sigh of relief following the U.S. midterm elections and made bets that a divided Congress would be good news 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 the likelihood of political gridlock in Washington.
The S&P`s biggest boosts came from the S&P technology sector <.splrct> and the healthcare stocks <.spxhc>, with both indexes gaining 2.9 percent. The consumer discretionary sector <.splrcd> climbed 3.1 percent, spurred by a 6.9 percent rise in Amazon.com
"Now we`re in an environment that people can understand again so they`ll be willing to put some money back on the table. There was a little fear out there," said Peter Tuz, president at Chase Investment Counsel Corp in Charlottesville, Virginia.
The Dow Jones Industrial Average <.dji> rose 545.29 points, or 2.13 percent, to 26,180.3, the S&P 500 <.spx> gained 58.44 points, or 2.12 percent, to 2,813.89, and the Nasdaq Composite <.ixic> added 194.79 points, or 2.64 percent, to 7,570.75.
The CBOE Volatility Index <.vix>, the most widely followed gauge of expected near-term gyrations for the S&P 500, finished down 3.55 points at 16.36, its lowest close in about a month.
While a divided Congress will make it harder for President Donald Trump to push through new legislation such as additional tax cuts, investors were not expecting a reversal of tax cuts and deregulation already enacted under Trump.
"This outcome probably provides the most paralysis for new policies," said Brian Nick, chief investment strategist for Nuveen Asset Management in New York, adding that growth sectors such as tech and healthcare would continue to be strong.
"In a scenario where there`s no (additional) fiscal stimulus and we`re not experiencing severe growth concerns in terms of contraction, they`re the best bet," he said.
Some strategists said Democratic control of the House means that Trump will have a harder time gaining support for efforts to impose new regulations on Amazon.com
But even as technology and healthcare stocks soared, several investors questioned whether the sectors could now be at risk of additional regulatory scrutiny.
Even after Wednesday`s gains, the S&P 500 was 4 percent below its record close in September, as investors kept their eyes on rising interest rates and the U.S.-China trade war.
The Federal Reserve began a two-day monetary policy meeting on Wednesday, but no rate increase was expected when it releases its policy decision on Thursday. The Fed is expected to raise rates in December, at its last policy meeting of the year.
Health insurers Humana Inc
Anadarko Petroleum Corp
Advancing issues outnumbered declining ones on the NYSE by a 3.27-to-1 ratio; on Nasdaq, a 2.31-to-1 ratio favoured advancers.
The S&P 500 posted 35 new 52-week highs and three new lows; the Nasdaq Composite recorded 67 new highs and 71 new lows.
On U.S. exchanges 8.0 billion shares changed hands compared with the 8.64 billion average for the last 20 sessions.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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