While you were sleeping: Clinton seen leading
Nov. 9 (BusinessDesk) - Wall Street advanced, recovering from earlier losses, amid signs that US voters are favouring Democratic candidate Hillary Clinton to become the next president.
Republican rival Donald Trump is trailing Clinton on election day.
In 12.44pm trading in New York, the Dow Jones Industrial Average rose 0.7 percent, while the Nasdaq Composite Index added 0.8 percent. In 12.28pm trading, the Standard & Poor’s 500 Index increased 0.6 percent.
Gains in shares of Travelers and those of Home Depot, up 1.6 percent and 1.3 percent respectively, led the advance in the Dow.
Clinton has a 90 percent chance of defeating Trump, according to the final Reuters/Ipsos States of the Nation poll released on Monday.
To be sure, a Clinton victory is not taken for granted.
"The election event risk is asymmetric,” Ian Lyngen, head of US rates strategy at BMO Capital Markets, a primary dealer, told Bloomberg. “Either a Trump victory will trigger a massive flight-to-quality move, or a Clinton win will result in a more modest bid for risk assets and status-quo expectations.”
A Clinton victory is seen underpinning the odds of a US Federal Reserve interest rate increase next month. Data compiled by Bloomberg based on fed funds futures trading show an 86 percent probability of higher borrowing costs by year end, up from 76 percent on Friday.
Indeed, Chicago Fed President Charles Evans said it was “reasonable” for the Fed to hike rates in December given the strength of the U.S. economy.
"The outlook and the fundamentals continue to look pretty good," Evans told investors and economists at a UBS bank luncheon, Reuters reported. "There is some risk here but I think that December is looking—if the data continue to come in, and we're almost there—it should be reasonable."
Weighing on sentiment were some disappointing earnings from companies including CVS and Hertz, which each downgraded their full-year profit guidance.
CVS shares traded 10.9 percent lower as of 12.41pm in New York, while Hertz shares sank 31.6 percent.
Hertz severely missed the mark. That made investors worried about rival Avis Budget Group, sending shares 8.8 percent lower.
"The stock [of Hertz] will reflect a newfound lack of confidence in earnings visibility and the company's ability to provide achievable guidance," Deutsche Bank analyst Chris Woronka wrote in a note, according to Reuters.
In Europe, the Stoxx 600 Index finished the day with a 0.3 percent increase from the previous close, underpinned by better-than-expected earnings from Credit Agricole and Associated British Foods. Germany’s DAX Index rose 0.2 percent, France’s CAC 40 Index added 0.4 percent, while the UK’s FTSE 100 Index advanced 0.5 percent.