NEW YORK (Legal Newsline)-Wall Street posted gains Tuesday as investors rally amid hope the next U.S. president will take a fresh look at the global financial crisis, two leading economists told Legal Newsline.
The Dow Jones industrial average rose 305.45, or 3.28 percent, to 9,625 at 4:24 p.m. EST, as Americans decide whether Republican John McCain or Democrat Barack Obama will occupy the Oval Office.
"Whether either candidate wins, people are going to be relieved the uncertainty is over with," said Lawrence Harris, a professor of finance and business economics at the University of Southern California.
Harris, who served as the chief economist for the U.S. Securities and Exchange Commission from 2002 to 2004, said the president-elect will likely make a series of announcements to show their eagerness and preparedness to tackle the nation's economic woes.
"In uncertain environments investors tend to be conservative -- they don't venture, they don't take risks," said Harris, director of the USC Marshall School of Business' Center for Investment Studies.
Wall Street, he said, will be anxiously waiting to hear the president-elect's new policy proposals and whom he will nominate for secretary of the treasury.
"There will be an immediate effort to show that they are going to come in prepared to make a difference," Harris said. "Investors tend to hope, and if these things happen they will probably respond positively."
Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., said the 2008 election is very closely watched, by both investors and the general public.
"This election has really gotten people involved ," he told LNL. "A lot of it has to do with the magnitude of problems that have developed. You have people who have lost a good chunk of value in their 401(k) and they are not happy, and you have people struggling in the mortgage market looking for assistance."
Today's rallies on Wall Street are partly because the market is pricing on an Obama win, said Kyser, who is regarded as one of the top economists in California.
"Generally, the financial markets' participants tend to be a little more liberal, so they are rooting for Obama," he said.
The NASDAQ was up 53.79, or 3.12 percent, at 1,780.12 at 4:22 p.m. Meanwhile, the S&P 500 Index climbed 39.45, or 4.08 percent, to 1,005.75.
From Legal Newsline: Reach reporter Chris Rizo at firstname.lastname@example.org.