US stocks took a break from their dizzying election-fueled rally in a choppy Friday session as Wall Street watched presidential votes trickle in.
The Dow Jones industrial average dropped as much as 200.68 points, or 0.7 percent, in early trading but pared the loss after a stronger-than-expected jobs report showed the US economy adding 638,000 jobs in October. The blue-chip index was off 63.61 points, or 0.2 percent, at 28,326.57 as of 2:03 p.m.
The S&P 500 and the tech-heavy Nasdaq clawed back early losses through the morning and climbed as much as 0.1 and 0.2 percent, respectively as Joe Biden edged toward a victory over President Trump. The S&P was recently trading roughly flat while the Nasdaq was up 0.1 percent.
“The market is taking a breather after two days of pretty significant moves going into the weekend to see what else unfolds with the election before making any further moves one way or the other,” Matthew Palazzolo, senior investment strategist at Bernstein Private Wealth Management, told The Post.
The day started with investors cashing in some profits after four consecutive days of strong gains in stocks, fueled partly by hopes that a Republican-controlled Senate would prevent big changes to regulation or tax policy even if Biden wins the White House.
The three major indexes marched higher as Biden notched a narrow lead in Pennsylvania, which could secure him a majority of electrical college votes, while the jobs report offered some encouraging signs about the economic recovery from the coronavirus pandemic.
But there’s a lot of uncertainty left in the election, which Trump has tried to undermine with baseless claims of voter fraud. Four key states are still counting votes, and Georgia’s two Senate races appear headed for runoffs in January, giving Democrats a last-ditch opportunity to take the upper chamber of Congress.
“It still seems unlikely for the Democrats to pull a Senate comeback, but Wall Street might grow nervous in completely pricing out a ‘blue wave,’” Ed Moya, senior market analyst at OANDA, said in a commentary.
There are also questions about whether Congress will pass another stimulus bill to shore up the pandemic-battered economy and how big it might be. Senate Majority Leader Mitch McConnell said Friday that the strength of the jobs report meant the next spending package should be “something smaller,” two days after staying he wanted to pass a bill by the end of the year.
Despite the muted trading, the Dow had gained about 1,688 points for the week even at Friday’s intraday low following a more than 1,800-point loss last week.
With Post wires
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