Monday, November 3, 2008

Wall Street Takes a Break as Elections Loom

Investors were in a laid-back mood the day before America's critical presidential and congressional elections on Tuesday. With Barack Obama leading all of the major polls, there doesn't seem to be any sign of an exodus from stocks, as more than a few right-leaning pundits have suggested.

Rather, Wall Street spent most of Monday trading in a narrow range, sporting a wait-and-see attitude. Since election results won't be known until well after the close of trading on Tuesday, Election Day may turn look somewhat similar, with volume weak, the indices largely unchanged and trading limited to rounding out positions.

Dow 9,319.83 -5.18; NASDAQ 1,726.33 +5.38; S&P 500 966.30 -2.45; NYSE Composite 6,054.98 -6.11

Advancing issues beat decliners, 3563-2778. The gap between new lows and new highs continued to compress, down to 132 new lows to 21 new highs.

In economic news, which continues to be depressing, the ISM Manufacturing Index fell more than expected, to 38.9 in October, from 44.5 in September. This is really nothing new. The manufacturing sector hasn't been the beneficiary of good news in well over two years.

Much in the same vein, the three major US automakers - General Motors, Chrysler and Ford - saw their sales for October drop 45, 35 and 30%, respectively. They were not alone, however, as foreign automakers also saw sales slump. Toyota's sales fell 23%; Nissan's sales were down 33%. Honda was off 25%.

Normally, that kind of news would have sent stocks into a tailspin, but this was no ordinary day wrapped within an extraordinary two months on Wall Street. Bad news is now already discounted, and, to a large degree, ignored. Stocks are already at levels not seen in years, though a retesting of the lows will likely occur within weeks once the election passes by.

Oil for December delivery lighted up by $3.90, sending the price for a barrel of crude to $63.91. Gold gained $8.60, to $726.60, while silver added 2 cents to $9.75 per ounce.

Volume was very light, as expected.

NYSE Volume 1,017,059,000
NASDAQ Volume 1,808,486,000

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