US stocks hit pause on post-election rally but gain for week

Though Friday marked a pause in Wall Street’s post-election rally, the leading US stock indexes still turned in their strongest weekly performance since April.

Wall Street's main stock indexes took a breather on Friday but turned in their best weekly performance since April [File: Carlo Allegri/Reuters]

Wall Street’s main stock indexes posted a mixed finish on Friday as presidential ballots continue to be tallied in key battleground states and investors took heart from a better-than-expected monthly jobs report.

The Dow Jones Industrial Average ended the session down a little more than 66 points, or 0.24 percent, at 28,323.40.

The S&P 500 – a gauge for the health of US retirement and college savings reports – finished down 0.03 percent, while the tech-heavy Nasdaq Composite Index eked out a plus-side finish to close up 0.11 percent.

Though Friday hit pause on Wall Street’s blistering four-day post-election rally, all three main indexes turned in their strongest weekly performance since April.

While the “blue wave” many on Wall Street had predicted this election season has thus far failed to materialise, investors are focusing on the narrowing prospects for Democrats to take control of the Senate.

If Democratic presidential nominee Joe Biden does win the White House and Republicans manage to maintain their majority in the Senate, then the odds of Biden tax increases being passed by Congress diminish substantially.

Biden continues to close in on victory, taking the lead in Pennsylvania and erasing President Donald Trump’s lead in Georgia.

If Biden clinches victory in both states, it would be mathematically impossible for Trump to reach the 270 electoral votes threshold needed for victory.

After days of making unsubstantiated claims of election fraud, the Trump campaign struck a more staid tone in a statement released on Friday.

“From the beginning we have said that all legal ballots must be counted and all illegal ballots should not be counted, yet we have met resistance to this basic principle by Democrats at every turn,” said the statement.

“We will pursue this process through every aspect of the law to guarantee that the American people have confidence in our government”.

Earlier on Friday, White House economic adviser Larry Kudlow told business news network CNBC that President Trump “intends to keep up the fight” as votes are tallied in key battleground states.

When asked if he felt a peaceful transfer of power in the US is necessary to keep financial markets stable, Kudlow said, “I think there will be a peaceful transfer of power, adding, “we abide by the rule of law and so will this president.”


A supporter of US President Donald Trump feeds her baby during a demonstration amid early results of the 2020 presidential election, in front of the Phoenix City Hall, in Phoenix, Arizona [File: Cheney Orr/Reuters]

The US could be looking at weeks of recounts and legal challenges to the election results.

Investors sentiment was lifted on Friday after the Bureau of Labor Statistics said before the open of trading on Wall Street that the economy added 638,000 jobs last month and the unemployment rate fell to 6.9 percent.

Though the headline numbers were better than expected, the pace of jobs creation is slowing and the economy is facing substantial headwinds.

COVID-19 infections are spiking in the US and Europe, ushering in business-sapping restrictions. And Washington’s failure to pass another round of virus relief aid threatens to draw down savings of the nation’s most vulnerable households.

While many believe a new round of stimulus will be forthcoming near the end of the year or slightly after, many on Wall Street are expecting a slimmer stimulus package than the $2.2 trillion Democrats in the House of Representatives have been seeking.

Among stocks making headlines on Friday:

Shares of Marriott International closed up 2.98 percent after the lodging giant reported a surprise third-quarter profit as it cut costs and domestic travel got a boost. The hotel chain saw a near doubling of occupancy rates from 19.6 percent in the second quarter to 37 percent in the third quarter in its North American hotels from the previous quarter.

Shares of Hershey closed up 3.31 percent after the confectionary giant reinstated its full-year financial forecasts on the heels of reporting better than expected sales and profits.

Source: Al Jazeera