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| Version 3 | Version 4 |
|---|---|
| US stocks fall as Democrats lead | US stocks fall as Democrats lead |
| (10 minutes later) | |
| US shares dipped on Wednesday after the Democrats gained back the House of Representatives in mid-term elections. | US shares dipped on Wednesday after the Democrats gained back the House of Representatives in mid-term elections. |
| The market is nervous about the impact Democrats, who have regained the House after 12 years, will have on business. | The market is nervous about the impact Democrats, who have regained the House after 12 years, will have on business. |
| It remains to be seen who will win control of the Senate, further adding to investor uncertainty. | It remains to be seen who will win control of the Senate, further adding to investor uncertainty. |
| The Dow Jones was trading 28 points, or 0.2%, lower at 12,128.20 in early trading, after falling as much as 0.5%. The S&P 500 and Nasdaq were down 0.2%. | The Dow Jones was trading 28 points, or 0.2%, lower at 12,128.20 in early trading, after falling as much as 0.5%. The S&P 500 and Nasdaq were down 0.2%. |
| "This is almost the worst possible outcome for the markets," said Al Goldman, a strategist at AG Edwards. | "This is almost the worst possible outcome for the markets," said Al Goldman, a strategist at AG Edwards. |
| "Usually the market can deal with whatever outcome, except an uncertain one." | |
| Business fears | |
| There are fears that Democrats may look to raise taxes and the minimum wage once they control the House of Representatives - and possibly the Senate. | There are fears that Democrats may look to raise taxes and the minimum wage once they control the House of Representatives - and possibly the Senate. |
| Analysts said that the firms most likely to be affected by the Democrats' win were in the defence, pharmaceutical, oil and insurance industries. | Analysts said that the firms most likely to be affected by the Democrats' win were in the defence, pharmaceutical, oil and insurance industries. |
| Alternative energy firms, however, may be among those to benefit. | Alternative energy firms, however, may be among those to benefit. |
| Democrats may also be less favourable to small business, especially in relation to tax breaks. | Democrats may also be less favourable to small business, especially in relation to tax breaks. |
| Global concerns | Global concerns |
| There is also concern that hopes for world trade talks may have been dealt a fatal blow by this election, with the Democrats unlikely to grant President Bush the authority to negotiate any further trade deals after the current provision runs out on 1 July 2007. | There is also concern that hopes for world trade talks may have been dealt a fatal blow by this election, with the Democrats unlikely to grant President Bush the authority to negotiate any further trade deals after the current provision runs out on 1 July 2007. |
| Fears about jobs being exported to China played an important role in Democratic gains in the Midwest. | Fears about jobs being exported to China played an important role in Democratic gains in the Midwest. |
| However, the bond markets may welcome the Democrats' stated commitment to tackle the long-term budget deficit. | However, the bond markets may welcome the Democrats' stated commitment to tackle the long-term budget deficit. |
| The deadlock may actually make it harder to get through any major spending programmes or additional tax cuts, analysts say. | The deadlock may actually make it harder to get through any major spending programmes or additional tax cuts, analysts say. |
| Tackling the twin budget and trade deficits is a big task that requires a bipartisan approach - something that both sides pledged to do after the election. | Tackling the twin budget and trade deficits is a big task that requires a bipartisan approach - something that both sides pledged to do after the election. |
| The economy proved a potent issue at the election, with many voters fearing for the future, despite the relatively strong economic performance of the Bush administration so far. | The economy proved a potent issue at the election, with many voters fearing for the future, despite the relatively strong economic performance of the Bush administration so far. |
| Among the concerns was the fact that real wages did not seem to be rising for ordinary voters despite strong growth. | Among the concerns was the fact that real wages did not seem to be rising for ordinary voters despite strong growth. |
| If the US economy continues to slow down, the economy will also be an issue in the 2008 presidential election. | |
| Wider fall | Wider fall |
| Even though the stock market fell, the Dow index remained above the 12,000 mark, a level it topped in October as it climbed to a record. | Even though the stock market fell, the Dow index remained above the 12,000 mark, a level it topped in October as it climbed to a record. |
| The decline in US stocks echoed a general trend of declining European share indexes. | The decline in US stocks echoed a general trend of declining European share indexes. |
| In the UK, the FTSE 100 of leading shares closed 0.08% down to 6,244 while Germany's Dax ended 0.2% lower at 6,349 and France's Cac 40 was 0.6% lower at 5,437. | In the UK, the FTSE 100 of leading shares closed 0.08% down to 6,244 while Germany's Dax ended 0.2% lower at 6,349 and France's Cac 40 was 0.6% lower at 5,437. |