Stocks rose on Wednesday ahead of the results of the 2020 U.S. presidential election, which so far has no clear winner and ballots may take a few days to count due to unprecedented levels of mail-in voting. At this point, both President Donald Trump and Democratic challenger have a shot at winning the White House, with votes in key states still being too close to call.
Meanwhile, some unrelated economic data was released on Wednesday, showing declaration in recovery for the service sector and private payrolls in October. The Institute for Supply Management's October services index headline reading declined to 56.6 from September's 57.8. While the index was anticipated to retract slightly, October's fall was more than expected. The ADP employment report also signaled a decline in private payroll growth, with October adding only 365,000 more jobs when it was expected to add over 600,000.
Here's how the market settled for the mid-week:
S&P 500 Index (NYSE: SPY): +2.20% or +74.28 points to 3,443.44
Dow Jones Industrial Average (NYSE: DIA): +1.34% or +367.63 points to 27,847.66
Nasdaq Composite Index (NASDAQ: QQQ): +3.85% or +430.21 points to 11,590.78
For Major Stock News, mega-cap tech companies staged a large rally ahead of election results: Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Facebook (NASDAQ: FB) Google (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT) and Netflix (NASDAQ: NFLX). Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT) jumped higher after early voting projections show that Californians have decided that the ride-sharing companies should classified as independent contractors rather than employees. Biogen (NASDAQ: BIIB) shares soared over 40% after the U.S. Food and Drug Administration stated that the biotech's experimental Alzheimer's drug has provided "substantial evidence of effectiveness to support approval."
For Sector Performance, industries ended Wednesday's session mixed despite broader market gains. Health Care (NYSE: XLV) and Communication Services (NYSE: XLC) were the biggest winners at over 4% following preliminary U.S. election results. Information Technology (NYSE: XLK) and Consumer Discretionary (NYSE: XLY) also jumped over 3%. For performance losers, Materials (NYSE: XLB) lead declines, as Utilities (NYSE: XLU), Financials (NYSE: XLF) and Industrials (NYSE: XLI) dropped 1% or more.
For Commodities and Currency, the U.S. Dollar (NYSE: UUP) rose on Wednesday as it was projected that Democrats were not going to flip the Republican held Senate due to pending election results; this strengthened the prospect of a smaller coronavirus stimulus package. The dollar index was up 0.27% against other global currencies at 93.39, after reaching a one-month high of 94.31 in overnight trading. Gold (NYSE: GLD) prices fell on Wednesday as larger coronavirus stimulus hopes dimmed. Spot gold fell 0.7% to $1,896.02 per ounce, while gold futures settled 0.7% lower at $1,896.20. Crude oil futures jumped on Wednesday after President Donald Trump prematurely claimed election victory. International benchmark Brent Crude (NYSE: BNO) gained 2.3% to $40.63 per barrel, while West Texas Intermediate (NYSE: USO) surged 4% higher at $39.15 per barrel. A Trump reelection victory is bullish for oil because of his administration's sanctions on Iran and his support for Saudi-led oil production cuts. Potential bearish outcomes for oil include a contested election or prolonged uncertainty. A victory for former Vice President Joe Biden would be more of a neutral stance for oil, given his political platforms of renewable energy.
For Thursday, market participants will look for a clearer victor of the 2020 election as state polling results continue their ongoing release. The Labor Department's weekly jobless claims report is also slated for release, with consensus economists expecting 728,000 new claims.