- The Washington Times - Wednesday, November 3, 2004

NEW YORK - Wall Street celebrated President Bush’s re-election with a solid rally yesterday, surging higher as investors welcomed continuity in Washington and shrugged off higher oil prices.

Sam Stovall, chief investment strategist at Standard & Poor’s, characterized the advance as “a Republican-inspired relief rally.”

After weeks of worry that there would be no clear winner, the stock market would likely have gone up either way. But the fact that the victory went to the Republican incumbent — widely perceived as more business-friendly than Democrat John Kerry — might have added to Wall Street’s cheer, he said.

“I think the market was relieved that we came to a fairly rapid conclusion,” Mr. Stovall said. “We probably would have seen a rally if Kerry had been elected as well, simply because it would have resolved the issue. But with a Republican win, there might be some stronger legs underneath it.”

The Dow Jones Industrial Average closed up 101.32, or 1.01 percent, at 10,137.05.

The broader gauges also finished higher. The Standard & Poor’s 500 index added 12.64, or 1.12 percent, to 1,143.20. The Nasdaq Composite Index rose 19.54, or 0.98 percent, to 2,004.33, its highest close in four months, putting it back in positive range for the year. The Dow is still in negative territory for 2004, while the S&P; 500 has logged a gain.

Anxiety about the outcome of the election hobbled the market for weeks, keeping stocks in a tight trading range. While Wall Street was obviously pleased with the result, analysts warned the week could end with some profit-taking as investors start refocusing on the economy.

“Overall I think the market will be on a better footing with this behind us,” said Jay Suskind, head trader at Ryan Beck & Co. “I think now the market gets back to business and says OK, what’s the real picture with the economy? You’ll see a rally, but then I think you’ll also see some profit-taking. A lot of the issues we’ve all been concerned about are still there. But this was the biggest uncertainty out there, so its back to fundamentals.”

Lofty energy prices have weighed heavily on stocks in recent weeks, although crude has stepped back from its record highs over the past several sessions. It was back on the rise after the government’s weekly fuel report, however. Initially, a bigger-than-expected 6.3 million barrel run-up in crude supplies seemed to overshadow a 900,000-barrel drawdown in heating oil.

But with traders expecting a slight buildup, the seventh week of heating oil declines seemed to take a toll, especially in the face of rising concern that high energy costs this winter could cut into consumer spending. Light, sweet crude for December delivery settled up $1.26 at $50.88.

With the election resolved, several sectors of the market that had come under pressure at the prospect of a Kerry win posted gains. Among these, pharmaceutical stocks, which might have suffered if Mr. Kerry had gone through with a plan to import cheaper drugs from abroad; Merck & Co. was up $1.07, or 4 percent, at $27.87, and Pfizer Inc. added 75 cents, or 2.6 percent, to $29.45.

Defense stocks soared as well as investors anticipated continued spending on military projects overseas. Boeing Co. climbed $1.27, or 2.6 percent, to $51.15; General Dynamics Corp. added $3.79, or 3.8 percent, to $104.27; and Northrop Grumman Corp. surged $2.10, or 4.1 percent, to $53.75.

Advancers outnumbered declining issues by more than 3 to 1 on the New York Stock Exchange, where preliminary consolidated volume came to 2.2 billion shares.

The Russell 2000 index was up 9.89, or 1.69 percent, at 595.33.

Overseas, Japan’s Nikkei stock average surged 1.43 percent. In Europe, France’s CAC-40 added 0.11 percent, Britain’s FTSE 100 rose 0.54 percent and Germany’s DAX index was up 0.04 percent.

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