Posted on 11/08/2006 6:22:48 AM PST by KeyLargo
Business, Investors Root for Split Decision, Gridlock
Wednesday, November 08, 2006
By Alexander B. Duncan
NEW YORK — As Americans voted in Tuesday's midterm elections, the U.S. business and financial communities appeared to be cheering for a split Congress and the resulting legislative gridlock on Capitol Hill.
"Gridlock is good, Wall Street doesn't like change," said Charles Gabriel, senior Washington analyst for Prudential Securities. "You're not going to have runaway spending increases, you won't have a repeal of the Bush tax cuts, and there's no legislative change that will roil industries. The green light is on for equity investments because you've got protection against any major changes."
Generally, the Republican Party is regarded as more business-friendly because of its tax policies and softer stance for requirements on corporate governance. After 12 years of a Republican majority in the House, four years of GOP control in the Senate and six years for Republican President George W. Bush in the White House, much of the law enacted in Washington has had a pro-business bend.
(Excerpt) Read more at foxnews.com ...
How does that account for the lower opening today?
Man. What planet is this guy living on?
You never want the government to "fix" anything, and if they are so devided it might well be a good thing.
If they are not made permanent, yes you will.
Just a hunch,I doubt the investors will be rooting long !!!
Is that number final? I just woke up. Did we at least hold the Senate?
I have no problem with the government doing nothing, except making the tax cuts permanent.
Not yet, it's gonna be a long court battle.
"With a 50-50 in the senate ..."
There will be some Rino who will switch parties and hand control to the marxist party known as dem-o-rats.
Wall Street views uncertainty as the worse possible news.
Yeah. They'll save on fuel costs for now, but that situation will get highly interesting in the near future. All that matters is what we can get with cheap transportation and cheap labor today, though. ...right?
I agree.
I know I like gridlock.
No numbers are final.
Montana is still counting and maybe into a recount and Allen has not conceded. VA's race may not be known for weeks.
If that happens, the GOP needs to be prepared to offer Lieberman anything he wants to caucus with the GOP.
Move their investments into bonds?
Yeah, but a Senate up in the air until November 27th (apparently that is the earliest a recount can begin in Virginia) would be bad for business. I hope it's resolved long before then.
How does that account for the lower opening today?
The market has been generally up, I'd guess profit taking.
As a matter of fact, I'd bet that the market will see some down ticks for the next week.
Followed by a minor rally to end the year.
But what do I know?
One huge flaw in the gridlock theory ... tax cuts expire automatically; gridlock will prevent their extension. No new taxes will result but the old ones will be back, just as the economy starts its downturn.
A couple of points ain't gonna kill me either way. If they expire, they expire. I suspect what GWB has been able to pass thru Congress has cost me more than I saved from the tax cuts. Just the medicare bill alone prolly cost me more. I recall some pretty hideous transportation bills and other things. Without seeing a table of the actual numbers, I can't really sweat it either way. No, I don't like my taxes going up, but then again, I'm not so sure anyone's gonna touch my bracket. The top bracket might get hit, but that ain't me at the moment. Death tax doesn't affect me either, so I'm probably ok either way.
WOOOOOWWWWWW, look at that Dow go.
I think the idea is that what they aren't able to pass would have cost more than whatever they would have saved us. I mean, c'mon, it's not as if they're looking out for us in DC. They spend spend spend. I'd like to see an analysis of what taxpayers saved on taxes vs what new liabilities got passed thru the last six years. Does the tax cut offset the burden of the medicare bill, the transportation bill, etc? Maybe, but I don't know for a fact. It's conceivable that a do nothing congress is better than the alternative.
If we lose those two, we've lost the Senate, right? I thought we were taking a week off from this? That wasn't even 10 hours ago we made that commitment!! ROLFMAO!
I have not been to bed yet. Watching the DOW tank --- 44 points in the first minute.
You haven't been to bed yet? Yikes!
What happened to Missouri???? Did he lose by that much?
Talent lost and get this: they passed the CLONING initiative too!
Wait, not only did Talent lose, but stem cell won?????? What kind of country are we living in now? Hey, maybe I'll buy your daughter's house in the Cayman islands!
It's beautiful and entirely furnished. 100 yards from the beach.
I'm ready....Is she really selling?
Yep and she will be here on the fourteenth.
"Companies in the stem-cell sector showed gains after voters in Missouri narrowly approved a referendum guaranteeing federally approved stem-cell research and treatment will be available in the state. StemCells Inc. rose 33 cents, or 10.8 percent, to $3.40, while Geron Corp. rose 40 cents, or 4.8 percent, to $8.78. Aastrom Biosciences Inc. was up 13 cents, or 8.7 percent, to $1.62.
Also, companies in the mortgage business made advances on the notion that Democrats would push plans to broaden access to housing. Fannie Mae was up 50 cents at $60.40, while Freddie Mac was up 42 cents at $70.28."
Looks like investors will be jumping on the housing and stem-cell research bandwagon now.
http://news.yahoo.com/s/ap/20061108/ap_on_bi_st_ma_re/wall_street
Business
Nov. 8, 2006, 10:28PM
Idea of tied-up Congress pushes Dow to new high
By TIM PARADIS
Associated Press
NEW YORK - Stock indexes rose for a third straight session Wednesday, with the Dow Jones industrials reaching another record close as investors grew more confident that a huge victory by Democrats in congressional elections would result in gridlock and keep lawmakers out of the way of business interests.
The market had largely expected Democrats to gain control of the House of Representatives, but an undecided Senate race in Virginia had, during early trading, unnerved investors who dislike such uncertainty. Stocks showed gains after the announcement that Defense Secretary Donald Rumsfeld would resign.
"I would think over the next several weeks that investors should return their focus to the likelihood for interest rate moves in the decelerating economic climate, the moderating earnings growth and the weakening housing market," said Elizabeth Weymouth, global investment specialist at JPMorgan Private Bank.
The Dow rose 19.77, or 0.16 percent, to 12,176.54. The blue chips closed above the record of 12,167.02 set on Oct. 26 and came within a few points of a record trading high of 12,196.32 reached Tuesday.
The Standard & Poor's 500 index was up 2.88, or 0.21 percent, at 1,385.72, and the Nasdaq composite index rose 9.06, or 0.38 percent, to 2,384.94.
Bonds rose, with the yield on the benchmark 10-year Treasury falling to 4.64 percent from 4.66 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell.
The gains this week continue a run-up seen in October that was interrupted last week when a string of poor economic data sent stocks lower. Already this week the major indexes are up at least 1.5 percent.
Looking at the ramifications of the election, Weymouth said investors likely will consider whether Democrats might try to somehow cap prescription drug prices, increase the federal minimum wage or raise the 15 percent tax on some dividend gains.
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