NEW YORK Nov 4 Barack Obama swept to the White
House on Tuesday, leading a Democratic electoral land slide
that expanded the party's majorities in both chambers of
That puts the focus on how key market sectors, including
alternative energy, healthcare, defense and finance will fare
under his policies.
Below is a snapshot of analysts' views on what could
influence sectors and individual stocks:
Many in the energy sector see an increase in government
support coming as a way to help jump start the economy and
stimulate job growth.
Shares of solar energy companies, beaten down by credit
worries and the drop in crude oil prices, have surged in
anticipation of a policy focus. Suntech Power Holdings Co Ltd
STP.N, JA Solar Holdings Co Ltd (JASO.O) , First Solar Inc
(FSLR.O) and SunPower Corp SPWRA.O are all up by more than 50
percent in the past week.
Shares of Denmark's Vestas (VWS.CO) , the world's No. 1
wind turbine maker, are up by nearly two-thirds in that time.
Experts also see natural gas for electricity generation and
industry as key to the energy plans regardless of who becomes
president. For details, see [ID:nN04541908][ID:nN29484206]
HYBRID CARS/SMART GRID
Analysts at Louis Capital Research noted a U.S. drive for
more hybrid cars would benefit Energy Conversion Devices Inc
ENER.O , which patented the nickel metal hydride storage
technology used in hybrid electric vehicles.
Democrat Barack Obama's green energy push may also have a
big impact on the long-neglected problem of getting power from
the source to users.
Potential beneficiaries include Swiss company Landis+Gyr,
which received $1.1 billion in new financing in June and had
been looking at floating shares. Redwood City, California-based
Silver Spring Networks, which just got $75 million in venture
capital funding, and Pittsburgh-based BPL Global, are also seen
U.S. defense contractors thrive as well during Democratic
administrations, if not better, than in Republican ones, and
the likely election of Obama as president offers no hint of
being an exception.
Likely beneficiaries include companies with long-term
contracts building fighters, bombers, warships and missiles --
the bread and butter for Lockheed Martin Corp (LMT.N) ,
Northrop Grumman Corp (NOC.N) and other big contractors.
Likely losers in the event of an Obama win are companies
with lucrative contracts supplying U.S. forces in Iraq, such as
bullet-maker Alliant Techsystems Inc ATK.N , armor plate
maker Ceradyne Inc CRDN.O , or large contractors making
fighting vehicles such as General Dynamics Corp (GD.N) and BAE
Systems Plc (BAES.L) .
Boeing (BA.N) looks like a winner, given Democrats' staunch
support for the company in its effort to win a controversial
$35 billion refueling tanker contract, which will be put up for
grabs again next year. For details, see
It may be tempting for investors in pharmaceutical and
biotech stocks to rush for the exits if a Democratic
administration takes over the White House, but drugmakers are
about to prove once again why they are a safe haven.
Major decisions on how to cope with the credit crisis are
likely to dominate U.S. government thinking in the new year,
bumping down healthcare reform on the priority list for the new
president and members of Congress.
That spells relative stability for drug stocks, which is
attractive to investors seeking safety after a terrible October
for the stock market, one of the worst months on record.
Additionally, there are stocks likely to benefit regardless
of who wins, including stem cell companies.
Both Obama and Republican presidential candidate John
McCain have voted to overturn current limits on federal funding
for stem cell research. That has pushed up the shares of Geron
Corp (GERN.O) 33 percent over the past week. Shares of Aastrom
Biosciences Inc ASTM.O and StemCells Inc STEM.O have
doubled over the same period. For details, see [ID:nN03338994]
A Democratic sweep in Tuesday's U.S. elections may clear
the way for changes to Internet policy sought by Google Inc
(GOOG.O) that would bar Internet providers from discriminating
against some Web content.
The "net neutrality" issue pits Internet service providers
(ISPs) like Comcast Corp (CMCSA.O) and AT&T (T.N) against
content companies like Google and Microsoft Corp (MSFT.O). For
details, see [ID:nN31379502]
If voters put Obama in the White House and bolster that
party's ranks in Congress, the pendulum could shift decisively
toward helping bank customers more, particularly as they try to
deal with an economic downturn that could be the worst since at
least the early 1980s.
Banks may face pressure to renegotiate mortgages to help
borrowers avoid foreclosure, and to curb or lower fees on
credit cards. That could drive down margins at a time many
lenders are scrambling for deposits by offering high yields.
Some banks are not waiting for Washington to act before
taking steps they say will help struggling borrowers.
JPMorgan Chase & Co (JPM.N) , for example, last week
announced plans to modify up to $70 billion of mortgages,
including from the former units of Washington Mutual Inc
WAMUQ.PK that it acquired in September.
Bank of America Corp (BAC.N) , which bought mortgage
lending giant Countrywide Financial Corp in July, adopted a
similar program under pressure from regulators last month. For
details, see [nN03361917]
(Reporting by Reuters correspondents around the world,
compiled by Ellis Mnyandu)