Wall Street’s three-day winning streak came to an end Thursday as investors, taking a second look at Tuesday’s election results, questioned whether a Democratic Congress would be friendly to business.
NEW YORK (AP) — Wall Street’s three-day winning streak came to an end Thursday as investors, taking a second look at Tuesday’s election results, questioned whether a Democratic Congress would be friendly to business.
The losing session, which was also influenced by rising oil prices and a drop in consumer confidence, was to be expected after three days of gains that included a new closing high Wednesday for the Dow Jones industrials. Investors had driven stocks broadly higher this week on optimism that Democrats taking control of Congress would cause political gridlock that would be favorable to businesses.
But after more time to mull over the election, investors are starting to become concerned about an “anti-business stance” among Democrats in Washington, said John O’Donoghue, co-head of equities at Cowen & Co.
“The market’s been looking for a reason to go to the downside, and a change in Washington is as good an excuse as any,” O’Donoghue said.
Meanwhile, U.S. consumers’ confidence weakened slightly in early November but stayed near a 15-month high, according to the University of Michigan. That data overshadowed good news from the Commerce Department that America’s trade deficit showed a sharp improvement in September, and a report from the Labor Department that said the number of newly laid off workers had a bigger than expected drop last week.
According to preliminary calculations, the Dow fell 73.24, or 0.60 percent, to 12,103.30. The Dow reached a new closing high of 12,176.54 on Wednesday.
Broader stock indicators also fell. The Standard & Poor’s 500 index fell 7.39, or 0.53 percent, to 1,378.33, while the Nasdaq composite index fell 8.93, or 0.37 percent, to 2,376.01. The technology-laden Nasdaq was higher earlier in the day on strong earnings results from Cisco Systems Inc.