Wall Street joins nation in long wait
© St. Petersburg Times, published November 9, 2000
Drug and tobacco stocks got a boost Wednesday as some investors bet that Gov. George W. Bush would end up winning the White House. But more of them sat back to wait for the results of the hotly contested presidential election.
The Dow Jones Industrial Average lost 45.12 points, barely a blip in the often-volatile market. It closed at 10,907.06. The Nasdaq Composite Index continued its long slump, falling another 184.09 points to 3,231.70. But analysts blamed that on worries about earnings for technology companies, not the election.
"The message of the election is that the next president does not have a mandate of the people, and that means he is not going to be able to get everything done that he wants," said Scott Brown, senior economist for Raymond James & Associates Inc. in St. Petersburg.
Far from lamenting the possibility of gridlock in Washington, many investors and business leaders find that possibility appealing. The popular wisdom on Wall Street is that industries and the economy fare better without a lot of political meddling. Stocks soared during the Clinton presidency with Republicans controlling Congress and a Democrat in the White House.
The new president -- whether it's Bush or Vice President Al Gore -- will win by only a whisker. Although a Bush victory would mean Republicans control the White House and Congress, it would not be by much.
"It's a razor-thin edge in Congress and as far as I'm concerned, that's fine," said Bob Beall, chairman of Bradenton-based Beall's Department Stores.
Buyers of drug, tobacco and oil stocks were betting Wednesday that Bush will win, making increased regulation of those industries less likely. The drug industry, in particular, has feared the possibility of price controls in a Gore presidency.
Drugmaker Merck & Co. was the leading gainer in the Dow on Wednesday, hitting a new 52-week high, then closing at $90.81, up $3.81. Exxon Mobil, Philip Morris Cos. and Johnson & Johnson also were winners on the day.
But not every business leader thinks regulation is such a bad thing.
"A significant portion of our customers have been born through telecom reform," said Andy May, chairman of Largo's Paradyne Networks Inc., which makes telecommunications equipment.
"What we don't want to see is the momentum of telecom reform coming to a halt," he said. May said reform probably would continue under Bush or Gore, but that it would take different forms.
He said a Gore presidency probably would put more emphasis on technology. "The continued promotion of high tech and having someone really for it and really understanding would be a good thing," he said. "But I don't believe the technology train can be stopped by anybody."
Tech Data Corp. chief executive Steve Raymund said he believes a Bush victory would be better for technology. The Clearwater company distributes computers and related products.
"I think we'd see in a Bush administration more active support for technology initiatives, such things as curbing the power of the trial lawyers," he said. "That would enable capital to flow more freely into the technology sector. Now with the threat of litigation, people are nervous about investing in our sector."
At Aerosonic Corp. in Clearwater, chairman J. Mervyn Nabors said a Bush presidency would benefit defense contractors. Aerosonic makes aircraft instruments for military and civilian markets.
"I believe that if Bush gets in that defense spending will increase and that it needs to increase," he said. "We're kind of getting behind the power curve here on weaponry. If Gore gets in, I think it will be just like it's been with Clinton."
Economist Brown said the election is not likely to have much immediate impact on the stock market no matter who wins.
"There may be a little bit, but I expect it to be relatively short-lived," he said. "The focus of the markets then may turn more toward the current state of the economy, the outlook for earnings and the outlook for Federal Reserve policy."
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