Stocks closed Tuesday’s seesaw trading session narrowly mixed, as Americans flocked to the polls to elect their next president and investors remained hopeful that there would be a clear winner in the presidential election by Wednesday morning.
The Dow Jones industrial average was off 18.66 points, or 0.2 percent, at Tuesday’s close, after losing solid gains earlier in the session amid speculation about the outcome of the U.S. presidential election. The late-day sell-off ended a five-day streak of gains that had added 304 points to the index since last Tuesday.
Other indices closed Tuesday higher. The Standard & Poor’s 500-stock index was up a fraction of a point, while the technology-rich Nasdaq composite index added 4.92 points, or 0.3 percent.
Stocks held on to a solid advance for most of Tuesday’s session, buoying Wall Street, where most traders hope to see a quick resolution to what has been a tightly-fought presidential election.
“People down here are hearing that there has been a large turnout to vote today, and so the feeling is there is likely to be a clear winner by the morning, as opposed to the long drawn-out stalemate we saw in the 2000 election” Arthur Cashin, UBS PaineWebber's head of floor trading at the New York Stock Exchange, told CNBC.
For weeks, public opinion polls have been extremely close, with many showing a tie in the White House battle between President George W. Bush and his Democratic contender, Sen. John Kerry, making it impossible for traders to predict a likely victor.
“If we get a repeat of the uncertainty we had in 2000 that might not be too bad for the market, but if it’s a tie and the decision goes to the House of Representatives, that will lead to a great deal of uncertainty and it would be bad news for the stock market,” said Peter Cardillo, chief strategist at New York brokerage S.W. Bach.
A continued decline in oil prices and a clear winner in the election by Wednesday morning could contribute to push the market higher for the balance of 2004, Cardillo added. The delayed election result and month-long legal dispute in the 2000 presidential election caused the stock market to sell off amid the uncertainty.
“We are at the end of a long, hotly fought political contest, and the market is going to have a nice sigh of relief just because it is over, regardless of the outcome,” said Arnie Owen, managing director at Merriman Curhan Ford & Co, a San Francisco-based brokerage. “The market knows how to deal with everything, and can price it accordingly, except uncertainty,” he added.
The ongoing decline in U.S. crude oil prices also buoyed investors earlier in the day, as it eased worries about slowing economic and corporate profit growth, which has been imperiled in recent months by higher energy prices.
Earlier in the day, the price of U.S. crude fell below the $50-per-barrel level for a second straight day and eventually settled at $49.62, down 51 cents on the New York Mercantile Exchange.
In corporate news, Emerson Electric Co. gained $1.25 to $65.53 as the diversified manufacturer saw its net income jump 28 percent. The company beat Wall Street profit forecasts by 5 cents per share.
National Semiconductor Corp. lowered its profit forecasts for the current quarter, citing sluggish sales and high inventories, much as Intel Corp. had done in September with its mid-quarter report. National Semi tumbled 29 cents to $16.40, while Intel climbed 17 cents to $22.61.
Consumer products maker Clorox Co. fell $1.38 to $53.77 after reporting that its first-quarter earnings fell 5 percent due to one-time charges stemming from a restructuring effort. The company still beat analysts’ expectations by 3 cents per share.
Insurance stocks were mixed as Merrill Lynch downgraded Aon Corp. and Willis Group Holdings Ltd. in response to New York Attorney General Eliot Spitzer’s investigations of the two companies. Aon lost 19 cents to $20.46 while Willis added 4 cents to $36.
Media reports said Time Warner Inc.’s struggling America Online unit would lay off 700 workers as the online service worked to stem a tide of subscriber defections. Time Warner was down 10 cents at $16.28 on the news.
In economic news, employment consulting firm Challenger, Gray & Christmas Inc. said employers announced 101,840 layoffs in October, down from 107,863 in September, but still above the 100,000 level for the second month in row. The Labor Department’s monthly job creation report, due Friday, will give a more comprehensive picture of the labor market.
Overseas, Japan’s Nikkei stock average rose 1.43 percent. In Europe, Britain’s FTSE 100 closed up 0.42 percent, France’s CAC-40 climbed 0.85 percent for the session, and Germany’s DAX index gained 0.62 percent.