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Markets ended in the green yesterday, as uncertainty over the White House race was about to end soon. The election results are expected to be declared late Tuesday or early Wednesday. The result of the presidential elections will play a vital role in determining different economic policies till 2016. Energy and material sectors were the major gainers among the S&P 500 industry groups for the second consecutive day.
The Dow Jones Industrial Average (DJI) rose 1.0% to close the day at 13,245.52. The Standard & Poor 500 (S&P 500) gained 0.8% to finish yesterday’s trading session at 1,428.35. The tech-laden Nasdaq Composite Index advanced 0.4% to end at 3,011.93. The fear-gauge CBOE Volatility Index (VIX) tumbled 4.6% to settle at 17.58. Total volumes on the New York Stock Exchange were 3.30 billion shares. Advancing stocks outpaced the decliners on the NYSE; as for 69% stocks that rose, 28% stocks moved lower.
Benchmarks rallied throughout the day as the uncertainty over the U.S. Presidential election was about to end. The rally in the market helped the Dow to gain more than hundred points. The uncertainty has kept the market stagnant for the past few weeks. According to the market experts, if Republican candidate Mitt Romney wins, then healthcare, energy and defense shares may go up.
Mitt Romney has already announced that if he wins then U.S. Federal Reserve Chairman Ben Bernanke will have to resign. Ben Bernanke’s exit would create uncertainty over the future of QE3. The Fed had announced on September 13 that it will buy back mortgage-backed securities worth $40 billion per month. This is an attempt to pull up a flagging economy and improve the labor market situation. The announcement of a third round of bond purchases had received wide acclaim.
Interestingly, whoever wins the election will have to solve a series of problems that the U.S. economy is currently facing. The fiscal cliff of $600 billion in spending and tax increases, which will expire at the end of this year, need to be resolved or else it may reportedly result in another recession. The $600 billion fiscal cliff has been affecting domestic markets for months.
Coming to corporate earnings, Computer Sciences Corporation (NYSE:CSC) surged 17.0% after the company reported a second-quarter profit, which came in above the Street’s estimates. AOL, Inc.’s NYSE:AOL) shares jumped 22.0% after the company reported better-than-expected profits and revenues in the third-quarter. AOL’s quarterly results were boosted by strong advertising growth.
The Energy Select Sector SPDR (XLE) gained 1.6% and was the major gainer among the S&P industry groups. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Marathon Oil Corporation (NYSE:MRO), Petroleo Brasileiro Petrobras SA (NYSE:PBR) and BP plc (NYSE:BP) surged 1.1%, 1.1%, 2.3%, 1.2% and 2.0%, respectively.
The materials sector also had a good run yesterday and ended in the positive zone. The Materials Select Sector SPDR (XLB) gained 1.1%. Stocks such as E I Du Pont De Nemours And Co (NYSE:DD), The Dow Chemical Company (NYSE:DOW), Merck & Co., Inc. (NYSE:MRK), PPG Industries, Inc. (NYSE:PPG) and Eastman Chemical Company (NYSE:EMN) rose 0.5%, 1.5%, 0.6%, 1.2% and 0.7%, respectively.