US stock index futures were little changed on Tuesday after Democrat Barack Obama decisively won the US presidency, eliminating uncertainty over who will guide the world's largest economy through what may be a protracted recession. The rise in futures suggested that on Wednesday Wall Street might build on Tuesday's rally, the biggest ever for an Election Day.
"Ultimately, what the markets like is clarity, and that's what they are getting here. At the margin that's a positive and was reflected in Tuesday's price action," said Mark Freeman, senior vice president and portfolio manager at Westwood Holdings Group in Dallas, Texas.
US S&P 500 stock futures dipped 1.60 points and were about even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures was off 9 points, and Nasdaq 100 futures gained 6.50 points.
"I think we will get a relief rally on Wednesday," said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey, with $22 billion in assets under management. But "I will be very sensitive to how Obama will address the role of the Federal Reserve, who the new Treasury secretary will be and the stance of the dollar."
Projections by US media late on Tuesday put Obama on course to win more than 270 electoral votes out of a possible 538 to defeat Republican John McCain in the 2008 US presidential election. In Tuesday's regular trading, US stocks registered their biggest Election Day rally ever as investors looked forward to the end of the long fight for the White House, and as energy companies' shares followed oil prices higher.
The rally pushed stocks to their highest close since October 6, with the S&P 500 crossing the 1,000 mark for the first time since October 13. The three major US stock indexes are all up around 18 percent from their closing low points on October 27.
Adding to the positive tone, the Treasury Department is exploring how to best expand its capital injection program and is considering specialty finance firms, such as General Electric's GE Capital unit, a source familiar with the government's thinking said. Shares of GE, an economic bellwether and a Dow component, rose more than 7 percent.
Chevron led the Dow higher after US crude futures jumped $6.62, or 10.4 percent, to settle at $70.53 a barrel on signals that Opec members were cutting output to comply with the group's recent decision.
More signs of thawing credit markets prompted investors to snap up shares at multi-year lows. The costs for banks to borrow from each other fell again, providing further hope that measures to shore up the credit markets are taking hold. But the presidential election was first and foremost on investors' minds. "There is new leadership tomorrow and whoever it is, it has to be better than what we've got," said Jim Paulsen, chief investment officer of Wells Capital Management.
On Tuesday, the Dow Jones industrial average rose 305.45 points, or 3.28 percent, to 9,625.28. The Standard & Poor's 500 Index jumped 39.45 points, or 4.08 percent, to 1,005.75. The Nasdaq Composite Index gained 53.79 points, or 3.12 percent, to 1,780.12. It was the biggest Election Day rally ever. Election Day was a market holiday before 1984.
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