McCain, Clinton wins may soothe Wall Street worries

By Caroline Valetkevitch and Kristina Cooke

NEW YORK (Reuters) - The victories by John McCain and Hillary Clinton in the New Hampshire primary could signal a less nerve-wracking presidential race for Wall Street, since both are known entities seen as party moderates.

While the winner of each party's nomination is still up in the air, Democrat Clinton and Republican McCain, both multiple-term senators, reshaped the U.S. presidential race with their comeback victories in New Hampshire.

Iowa caucus victories last week for Republican Arkansas former Gov. Mike Huckabee and Democrat Sen. Barack Obama, a first-tern senator from Illinois, had unnerved some on Wall Street, as they are seen as having less of a paper trail.

"Markets hate uncertainty, and if the country ends up nominating these two better-known candidates, then Wall Street may heave a sigh of relief," said Bob Doll, BlackRock Inc's global equities chief investment officer.

McCain, a senator from Arizona, is seen by analysts as having a solid track record of fiscal conservatism, while with Clinton, a New York senator, some investors are reminded of her husband Bill Clinton's presidential administration in the 1990s, when the stock market thrived.

Views that both candidates are moderates within their parties soothes some of Wall Street's fears of protectionism and tax increases, analysts said.

"Trade is important in this election and both these candidates are pragmatists and understand the importance of free trade," Doll said.

Michael Darda, chief economist at MKM Partners LLC, in Greenwich, Connecticut, said the two are also seen as more moderate in terms of fiscal policies.

"They are more centrist, so there wouldn't be as stark a difference between them on fiscal policy than you'd see with some of the other candidates," he said, pointing to Obama or Democrat John Edwards, a former North Carolina senator, versus Huckabee or former New York Mayor Rudy Giuliani, another Republican.

Huckabee has proposed eliminating all income taxes in favor of imposing a flat tax on retail sales. Meanwhile, Edwards, who came in second in Iowa and third in New Hampshire, has been an aggressive opponent of corporate power.

McCain's support of the Iraq war could help defense companies' shares if he becomes president, said Al Goldman, chief market strategist at A.G. Edwards.

With Clinton, Craig Hester, CEO of Hester Capital Management in Austin, Texas, raised concerns about the cost of some of her policy proposals, including a health-care overhaul, but said he still thought she was still likely to be more fiscally conservative than Obama or Edwards.

"The market knows what McCain stands for, and Hillary has been around long enough for us to have a fair idea what she's about," he said.

(Editing by Leslie Adler)