Stocks waver a day ahead of election
11/5/2012NEW YORK — Stock indexes drifted around the break-even mark today, one day before the U.S. presidential election. Trading was expected to be light.
National polls show President Obama and Mitt Romney in a tight race. The two candidates are spending the final days of the campaign holding rallies in Ohio and other states considered crucial to winning the White House.
Shortly after noon, the Dow Jones industrial average was down 12 points to 13,080.
Uncertainty surrounding the election makes investors reluctant to make any big moves, said Randy Frederick, managing director of active trading and derivatives at the brokerage Charles Schwab.
“I honestly think the markets are going to sit here and mark time,” Mr. Frederick said. “The markets have a tendency to trade sideways before big news events, and nothing is bigger than a presidential election.”
Mr. Frederick believes that no matter who wins, the stock market will likely surge once it's over for the sole reason that investors will know the name of the next president.
In other trading today, the Standard & Poor's 500 index lost one point to 1,413, while the Nasdaq composite index rose five points to 2,987.
Apple rose $8.09 to $584.94. The tech behemoth said it sold 3 million iPads in the three days after launching a smaller version of its tablet computer. Tim Cook, Apple's CEO, said the iPad Mini is “practically sold out.”
In the market for U.S. government debt, the yield on the 10-year Treasury note fell to 1.68 percent, down from 1.72 percent late Friday.
A measure of activity among so-called service companies, which employ about 90 percent of the American workforce, showed growth in October, but at a slower pace than in September, and just short of what economists expected.
In Europe, renewed focus on Greece's economic problems combined with uncertainty over the U.S. election to push stocks lower. Germany's benchmark index, the DAX, dropped 0.5 percent, and the CAC-40 in France fell 1 percent.
“With the race so close, investors are understandably risk-averse today,” said James Hughes, chief market analyst at Alpari, a London brokerage.
Among stocks making big moves:
— Tesla Motors jumped 6 percent after the maker of rechargable electric cars said it was now producing enough of its Model S cars to generate positive cash flow. Tesla, the brainchild of PayPal billionaire and SpaceX founder Elon Musk, now has two all-electric models on the market, the $109,000 Roadster and the new Model S. The company's stock gained $1.83 to $30.76.
— Stifel Financial said it reached an agreement to buy the investment bank KBW in a $575 million deal. The boards of both companies have already signed off, but shareholders of KBW and regulators must follow suit. KBW's stock leapt $1.18 to $17.48.
— Time Warner Cable lost 7 percent, the biggest drop of any company in the S&P 500. The country's second-largest cable company posted earnings today that fell short of analysts’ predictions. Time Warner reported stronger revenue across most of its businesses but lost 140,000 cable TV subscribers in three months. The company's stock fell $6.56 to $91.61.