By Susan Mathew
(Reuters) - The United States' big technology names led gainers on Wall Street on Wednesday, as investors sought the security of this year's big stay-at-home corporate success stories in the face of a presidential election set to go down to the wire.
Overall, Wall Street's main indexes surged to a more-than-one-week high with the tech-heavy Nasdaq (IXIC) outperforming. (N)
Following are the major movers as traders and investors digested the results and President Donald Trump's chances of beating Democratic challenger Joe Biden to win a second term.
BIG TECH
Technology mega-caps have benefited from Trump's softer stance on regulation and anti-trust policies as well as a tax cut that targeted U.S. big business.
Microsoft (O:MSFT), Intel (O:INTC) and IBM (N:IBM) rose between 0.4% and 2.2%, while FAANG stocks Facebook (O:FB), Apple (O:AAPL), Amazon (O:AMZN), Netflix (O:NFLX) and Google (O:GOOGL) surged between 3.2% and 7.5%.
"With a Trump presidency more likely than expected and a more evenly balanced Senate, any big change like higher capital gains tax or a legislation that regulates the tax more aggressively is less likely, and that's why tech is doing better," said TS Lombard's head of strategy, Andrea Cicione.
U.S.-LISTED CHINESE STOCKS
The iShares MSCI China ETF (O:MCHI) scaled all-time highs, up 4.5% as a Biden administration is expected to ratchet down tensions in the U.S.-China tariff war.
Shares of Baidu (O:BIDU) JD.Com (O:JD) Alibaba (N:BABA) rose between 2.8% and 5.6%.
DEFENSE
The iShares US Aerospace & Defense (Z:ITA) and the SPDR S&P Aerospace & Defense ETF (P:XAR) extended gains to a third session.
Contractors Northrop Grumman (N:NOC), Lockheed Martin (N:LMT) and Raytheon (N:RTX) rose between 2.2% and 6.0% after the Congressional results so far suggest Republicans retaining control of Senate.
"This removes the threat of a Blue Wave, and 'progressive' Democrats attempting to take an axe to the Department of Defense budget to fund other spending priorities," said Vertical Research Partners analyst Robert Stallard.
PHARMACEUTICALS
Pfizer (N:PFE), Merck & Co (N:MRK), Eli Lilly (N:LLY), Regeneron Pharmaceuticals (O:REGN), Bristol Myers (N:BMY) and Johnson & Johnson (N:JNJ) all rose between 2.7% and 7.5%.
Analysts at SVB Leerink said a Trump win with a close Senate race was almost an ideal outcome for biopharma and that an effectively split Senate would likely shield the industry from any sweeping reforms.
(GRAPHIC: Trump vs Biden stock baskets - https://fingfx.thomsonreuters.com/gfx/mkt/jbyprxamgpe/Pasted%20image%201604092623457.png)
BANKS
Some of Wall Street's big banks slid, with JP Morgan (N:JPM), Bank of America (N:BAC) and Citi (N:C) down between 1.0% and 2.7% as market participants feared a divided Congress would make it harder for Washington to pass another coronavirus stimulus package.
"Now there will be a split Congress and, therefore, a lot more fiscal restraint and those expectations of higher inflation and high yields favoring banks and financials will have to be reassessed," Cicione said.
Wells Fargo (N:WFC), Goldman Sachs (N:GS) and Morgan Stanley (N:MS) managed to eke out gains, with Goldman up 2%.
ALTERNATE ENERGY
The Invesco Solar ETF (P:TAN) dropped 3.5%, having gained more than 40% from September lows, while the iShares Global Clean Energy ETF (O:ICLN), another instrument representing the developing sector, which Biden had made a key plank of his agenda, fell 2%.
"The fact that Republicans are likely to retain a Senate majority would make it virtually impossible for Biden (if he wins) to enact his major climate reforms," said Raymond James analyst Pavel Molchanov.
Stocks of solar energy firms such as First Solar (O:FSLR), Enphase (O:ENPH) and JinkoSolar (N:JKS) traded between 4.4% and 10.3% lower.
INDUSTRIALS
Shares of infrastructure companies such as Caterpillar (N:CAT), Vulcan Materials (N:VMC) and Jacobs Engineering (N:J) slid between 5.3% and 7.5%.
MARIJUANA
Major cannabis producers had surged after the vice presidential debate, when Biden's partner on the ticket Kamala Harris said marijuana would be decriminalized at the federal level under their administration.
But with exit polls surprising markets, the ETFMG Alternative Harvest ETF (N:MJ) slipped 2.4%.
Shares of Tilray (O:TLRY), as well as U.S.-based listings of Canada's Canopy Growth (N:CGC), Cronos (O:CRON) and Aurora Cannabis (N:ACB) fell between 9.4% and 7.8%.
