Dow Jumps More Than 500 Points as Election Rally Rolls

Stock end higher Thursday with tech shares again leading the gains.
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Stock finished higher Thursday with tech shares leading the gains as the results in Tuesday's U.S. elections suggested the potential for corporate tax hikes and tighter regulations had diminished.

The Dow Jones Industrial Average finished up 542 points, or 1.95%, to 28,390, and the S&P 500 also rose 1.95%. The tech-heavy Nasdaq jumped 2.59% on reduced  regulatory risks.

All three indexes were headed for their best week since April. 

The Federal Reserve on Thursday held interest rates near zero and repeated its pledge to use its full range of tools to support the U.S. economy through the coronavirus pandemic. The central bank also said it would maintain its pace of $120 billion in monthly asset purchases.

Stocks ended higher Wednesday as investors bet that a divided government would be good for business, especially for tech giants such as Amazon.com  (AMZN) - Get Report, Microsoft  (MSFT) - Get Report and Alphabet  (GOOGL.) - Get Report

As for Tuesday's presidential election, Democrat Joe Biden won Michigan and Wisconsin, according to projections from both CNN and NBC, putting him closer to winning the presidency over Donald Trump. Biden has secured 264 Electoral College votes out of the 270 necessary to claim victory. Trump has 214.

Meanwhile, the Republicans appeared set to retain control of the Senate, despite a strong push by Democrats to take control of the upper house.

"If you look back over previous eras, when you have had a Democratic president and a split Congress, markets have risen around 13%," said Scott Glasser, co-chief investment officer at ClearBridge Investments. "There's no reason to think this will be any different."

However, Anthony Denier, CEO of commission-free trading platform Webull, said he "fears a drawn out and contested election with the expected civil unrest to follow is a pending headwind for the markets that is not yet being realized.

"How long will this election rally last, hard to say, but I would imagine it will end with the formal announcement of a presidential winner and the expected contestation to follow," he added.

The number of Americans filing for first-time unemployment benefits totaled 751,000 in the latest week, higher than forecasts, but down from 758,000 during the prior week.

The Labor Department will release the official U.S. jobs report for October on Friday.

General Motors  (GM) - Get Report rose 5.4% Thursday after posting much stronger-than-expected third-quarter earnings thanks to improving domestic demand for pickups and SUVs.

Qualcomm  (QCOM) - Get Report finished up 13% after the semiconductor company reported fiscal fourth-quarter earnings and guidance that topped analysts' estimates.

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