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While you were sleeping: UPDATED Trump win boosts stocks, greenback

Republicans are historically against governments meddling in businesses.

Margreet Dietz
Thu, 10 Nov 2016

Wall Street rose, bolstered by pharmaceutical stocks, after an upset victory for Republican candidate Donald Trump in the US presidential election.

Republicans won the White House as well as both houses of Congress.

"The markets were also not pricing in a Republican sweep, but now the victory makes you think maybe something can get done and the Republicans historically are against governments meddling in businesses and that's what you seeing played out today," New York-based JP Morgan Private Bank US equity strategist Nadia Lovell told Reuters.

The US dollar also gained, rebounding from an overnight slide.

About 85% of 62 respondents in a Reuters survey taken on Wednesday said they expected the Federal Reserve was on track to raise its key interest rate next month, its first hike in a year.

At the Wall Street close,, the Dow Jones Industrial Average rose 256.95 points, or 1.4%, to 18,589.69. The Nasdaq Composite Index and the Standard & Poor's 500 Index both rose 1.1% to 5251.07 and 2163.26 respectively.

Investors focus on benefits
Investors chose to focus on the benefits from a Trump presidency, some analysts said.

"At this point it is almost a Rorschach picture. If you want to be positive you can say at face value his policies are reflationary and less regulatory," David Lefkowitz, senior equity strategist at UBS Wealth Management Americas in New York, told Reuters.

"The sectors that benefit from that would be in terms of reflation, it is going to be financials, and less regulation it is going to be healthcare and financials."

Rallies in Pfizer and Merck shares, up 7.4% and 7% respectively, led the Dow higher.

Pharmaceutical stocks posted a relief rally. The election outcome "substantially diminishes the likelihood of significant pricing reform emanating from Washington," JP Morgan analysts said.

Shares of Caterpillar also surged, up 7%.

Meanwhile, US Treasurys dropped amid expectations that a Trump presidency will boost spending and inflation. Yields on the 10-year note jumped 15 basis points to 2% at noon in New York.

"The long end of the curve is under significant pressure for what the market believes to be the Trump platform: protectionism, retaliatory tariffs and fiscal stimulus, all of which are inflationary and bad for the dollar," Ian Lyngen, the New York-based head of US rates strategy at BMO Capital Markets, told Bloomberg.

In Europe, the Stoxx 600 Index ended the session with a 1.5% advance from the previous close, underpinned by gains in shares of drugmakers.

Germany's DAX Index rose 1.6%, France's CAC 40 Index increased 1.5%, while the UK's FTSE 100 Index gained 1%.



Margreet Dietz
Thu, 10 Nov 2016
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While you were sleeping: UPDATED Trump win boosts stocks, greenback