[IP] : Exit Poll Talk Hits the Stock Market
\Exit Poll Talk Hits the Stock Market
November 2, 2004
By REUTERS
Filed at 5:17 p.m. ET
NEW YORK (Reuters) - Blue chips fell on Tuesday in a sharp
reversal that trimmed gains in other indexes as Internet
sites suggested exit polls had Sen. John Kerry ahead of
President Bush in key states in the U.S. presidential
election.
The Dow Jones industrial average fell 18.66 points, or 0.19
percent, to end at 10,035.73.
But the Standard & Poor's 500 Index eked out a gain of just
0.05 of a point, or unchanged from a percentage standpoint,
based on the latest data, to close at 1,130.56, its sixth
day of gains. The technology-laced Nasdaq Composite Index
rose 4.92 points, or 0.25 percent, to finish at 1,984.79.
All three gauges had been higher, with the blue-chip Dow
average heading for a sixth straight day of gains. But they
trimmed gains sharply and headed lower at 2:48 p.m. after
traders heard about the exit poll speculation on the
Internet.
Shares of defense, pharmaceutical, health care and medical
technology companies led the reversal.
``What we are hearing is that there is some feedback coming
back from Ohio, that there could be a closer outcome out
there or John Kerry could even potentially win that
state,'' said Evan Olsen, head of equity trading at
Stephens Inc.
Lisa Hansen, head trader at Transamerica Investment
Management, said, ``Apparently the blogs are saying that
Kerry is ahead in one or two of the swing states and that's
why the market dipped.''
Turnout was unusually high as Americans voted to decide
whether the Republican incumbent Bush or the Democrat rival
Kerry would be the next U.S. president.
The S&P health care sector index, made up of companies that
Wall Street believes would do well under a second Bush
term, slid 1.5 percent in the 30 minutes after the Internet
talk spread. The index closed off 0.09 percent.
Among the biggest turnarounds was health insurer Humana
Inc., which closed down 66 cents, or 3.24 percent, at
$19.69. Big drug makers like Pfizer Inc. also are among
stocks expected to get a boost from a Republican
administration. Pfizer fell 10 cents, or 0.35 percent, to
$28.70.
Defense stocks also slipped on prospects of a Kerry
victory, with the S&P aerospace and defense index off 1.28
percent. The biggest decliners included General Dynamics
Corp., down $1.86, or 1.82 percent, at $100.48, and
Lockheed Martin Corp., down $1.68, or 3.01 percent, at
$54.11.
General Dynamics was viewed as a Bush stock since it makes
hardware like military vehicles and ships, while the
president's focus on missile defense was seen helping
shares of companies that make the equipment and technology.
Some investors said a Kerry sell-off might be short-lived.
``Fundamentally, there is nothing to indicate that Kerry
will be bad for the market,'' said Som Dasgupta, head of
equities trading at PNC Corporate Bank. ``There are all
kinds of statistics around (that) if the incumbent is a
Republican and a Democrat wins, then the initial market
sell-off is 1.5 percent. Then the market comes back up
around 2.8 percent through January.''
Stocks had been helped earlier in the session by falling
oil prices, as crude fell below $50 a barrel to the lowest
settlement price in more than a month. The December crude
futures contract settled at $49.62, down 51 cents, on the
New York Mercantile Exchange.
``Breaking below $50 was huge,'' said Todd Clark, head of
listed trading at Wells Fargo Securities.
Just four days ago, crude was trading close to $56 per
barrel.
Energy-sensitive issues, including airlines, attracted
buyers, with the American Stock Exchange airline index
rising 3.76 percent to its highest point since mid-July.
Continental Airlines shares rose 58 cents, or 6.07 percent,
to $10.14, Northwest Airlines Corp. advanced 32 cents, or
3.47 percent, to $9.54, and JetBlue climbed $1.38, or 6.19
percent, to $23.69.
http://www.nytimes.com/reuters/news/news-markets-stocks.html?
ex=1100436018&ei=1&en=89d93b2f2dd13975
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