Wall Street seeks safety of Big Tech as election hangs in the balance

(Reuters) – The United States’ big technology names led gainers on Wall Street on Wednesday, as investors sought the security of this year’s big stay-at-home corporate success stories in the face of a presidential election set to go down to the wire.

FILE PHOTO: The facade of the New York Stock Exchange is pictured in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

Overall, Wall Street’s main indexes surged to a more-than-one-week high with the tech-heavy Nasdaq .IXIC outperforming. [.N]

Following are the major movers as traders and investors digested the results and President Donald Trump’s chances of beating Democratic challenger Joe Biden to win a second term.


Technology mega-caps have benefited from Trump’s softer stance on regulation and anti-trust policies as well as a tax cut that targeted U.S. big business.

Microsoft MSFT.O, Intel INTC.O and IBM IBM.N rose between 0.4% and 2.2%, while FAANG stocks Facebook FB.O, Apple AAPL.O, Amazon AMZN.O, Netflix NFLX.O and Google GOOGL.O surged between 3.2% and 7.5%.

“With a Trump presidency more likely than expected and a more evenly balanced Senate, any big change like higher capital gains tax or a legislation that regulates the tax more aggressively is less likely, and that’s why tech is doing better,” said TS Lombard’s head of strategy, Andrea Cicione.


The iShares MSCI China ETF MCHI.O scaled all-time highs, up 4.5% as a Biden administration is expected to ratchet down tensions in the U.S.-China tariff war.

Shares of Baidu BIDU.O JD.Com JD.O Alibaba BABA.N rose between 2.8% and 5.6%.


The iShares US Aerospace & Defense ITA.Z and the SPDR S&P Aerospace & Defense ETF XAR.P extended gains to a third session.

Contractors Northrop Grumman NOC.N, Lockheed Martin LMT.N and Raytheon RTX.N rose between 2.2% and 6.0% after the Congressional results so far suggest Republicans retaining control of Senate.

“This removes the threat of a Blue Wave, and ‘progressive’ Democrats attempting to take an axe to the Department of Defense budget to fund other spending priorities,” said Vertical Research Partners analyst Robert Stallard.


Pfizer PFE.N, Merck & Co MRK.N, Eli Lilly LLY.N, Regeneron Pharmaceuticals REGN.O, Bristol Myers BMY.N and Johnson & Johnson JNJ.N all rose between 2.7% and 7.5%.

Analysts at SVB Leerink said a Trump win with a close Senate race was almost an ideal outcome for biopharma and that an effectively split Senate would likely shield the industry from any sweeping reforms.

(GRAPHIC: Trump vs Biden stock baskets – )


Some of Wall Street’s big banks slid, with JP Morgan JPM.N, Bank of America BAC.N and Citi C.N down between 1.0% and 2.7% as market participants feared a divided Congress would make it harder for Washington to pass another coronavirus stimulus package.

“Now there will be a split Congress and, therefore, a lot more fiscal restraint and those expectations of higher inflation and high yields favoring banks and financials will have to be reassessed,” Cicione said.

Wells Fargo WFC.N, Goldman Sachs GS.N and Morgan Stanley MS.N managed to eke out gains, with Goldman up 2%.


The Invesco Solar ETF TAN.P dropped 3.5%, having gained more than 40% from September lows, while the iShares Global Clean Energy ETF ICLN.O, another instrument representing the developing sector, which Biden had made a key plank of his agenda, fell 2%.

“The fact that Republicans are likely to retain a Senate majority would make it virtually impossible for Biden (if he wins) to enact his major climate reforms,” said Raymond James analyst Pavel Molchanov.

Stocks of solar energy firms such as First Solar FSLR.O, Enphase ENPH.O and JinkoSolar JKS.N traded between 4.4% and 10.3% lower.


Shares of infrastructure companies such as Caterpillar CAT.N, Vulcan Materials VMC.N and Jacobs Engineering J.N slid between 5.3% and 7.5%.


Major cannabis producers had surged after the vice presidential debate, when Biden’s partner on the ticket Kamala Harris said marijuana would be decriminalized at the federal level under their administration.

But with exit polls surprising markets, the ETFMG Alternative Harvest ETF MJ.N slipped 2.4%.

Shares of Tilray TLRY.O, as well as U.S.-based listings of Canada’s Canopy Growth CGC.N, Cronos CRON.O and Aurora Cannabis ACB.N fell between 9.4% and 7.8%.

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