“U.S. stock index futures signaled a firmer opening for Wall Street on Wednesday and Treasury futures rose in anticipation that the Federal Reserve will announce more asset purchases to stimulate the economy,” Harpreet Bhal reports for Reuters.
“Market reaction to Republicans’ victory in the midterm elections was relatively muted as investors have largely priced in an outcome that is seen as a net positive for business, with the focus firmly on the Fed meeting,” Bhal reports. “Republicans seized control of the U.S. House of Representatives and strengthened their ranks in the Senate in midterm elections after voters punished Democrats over high unemployment and a sluggish economic recovery.”
“A divided Congress is seen as supportive for stocks. Critics for example of the new healthcare law, which put pressure on related stocks earlier this year, hope Republicans can spearhead attempts to repeal or not fund parts of the reform,” Bhal reports. “But the S&P 500 index has gained almost 14 percent since September, and analysts said the result was largely priced in and may raise some doubts over fiscal spending to support the recovery, leaving stocks ripe for some profit taking.”
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