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US: Wall Street rallies after US midterm election yields split Congress
[NEW YORK] Wall Street soared on Wednesday, a day after hard-fought midterm elections resulted in a split Congress that analysts say is likely to halt any major advances in President Trump's economic agenda.
Analysts said markets were breathing a sigh of relief now that the uncertainty of the vote was behind them.
The benchmark Dow Jones Industrial Average got a 2.1 per cent bump, closing up more than 500 points at 26,180.30, the highest level since October 9.
The broader S&P 500 likewise rose 2.1 per cent, to finish at 2,813.89, while the tech-heavy Nasdaq gained 2.6 per cent to 7,570.75.
With a handful of races still too close to call, Democrats were on track to capture 30 or more seats, taking control of the House of Representatives and providing a check on Mr Trump's policies starting in 2019.
But Republicans appeared likely to win three to five Senate seats and solidify their control of the upper house following Tuesday vote.
Mr Trump declared victory, but also said he could work with Democrats to get legislation passed.
While a split Congress is unlikely to produce major new economic policy, it also is unlikely to rollback business-friendly changes enacted since last year.
"Now we can focus on the fundamentals, which are solid growth and strong corporate earnings," Alain Skrainka of Cornerstone Wealth Management told AFP.
He said the health care sector likely had little to fear from a Democratic House due to the expected partisan divide.
Democratic sweep of Congress would have been seen as a threat to Mr Trump's agenda and providing momentum to calls for an impeachment investigation, while a Republican sweep would have bolstered the odds for additional tax cuts that could have worsened the US fiscal outlook, analysts said.
Wells Fargo said the bipartisan Congress means the odds of "significant, market-moving legislation are minimal," and won't threaten the outlook for continued solid economic growth and moderate inflation.
Drug company share prices closed largely higher, suggesting investors did not see a threat to industry profits from Congress.
Tech shares also jumped. Amazon gained 6.9 per cent while Google-parent Alphabet rose 3.6 per cent and Microsoft added 3.9 per cent.