Dollar at seven-year high vs yen after U.S. vote

Wed Nov 5, 2014 4:39pm EST
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By Herbert Lash

NEW YORK (Reuters) - The dollar surged to a seven-year high against the yen and global equity markets rallied on Wednesday after the Republican Party seized control of the U.S. Senate in midterm elections, auguring well for pro-energy and other business policies.

The Dow and S&P 500 finished at record closing highs on the sweeping Republican victory that dealt a punishing blow to President Barack Obama, who is expected to limit his legislative agenda in his last two years in office.

The beaten-down energy sector .SPNY was the second-biggest gainer of the S&P 500's 10 sectors, rising 1.75 percent. The Republican majority in the Senate could lead to approval of oil and natural gas pipelines and reforms for crude and natural gas export laws. Utilities rose 2.31 percent.

"In the end, the results were pretty decisive," said John Carey, a portfolio manager at Pioneer Investment Management in Boston. "That's good news for the industries that had been subject to regulatory issues."

MSCI's all-country world stock index .MIWD00000PUS rose 0.31 percent. Stocks in Europe rose about 1.7 percent, helped by solid company results such as British retailer Marks & Spencer (MKS.L: Quote), whose shares surged 9.7 percent.

The Dow Jones industrial average .DJI closed up 100.69 points, or 0.58 percent, to 17,484.53. The S&P 500 .SPX gained 11.47 points, or 0.57 percent, to 2,023.57 and the Nasdaq Composite .IXIC lost 2.92 points, or 0.06 percent, to 4,620.72.

The pan-European FTSEurofirst 300 blue-chip index .FTEU3 rose 1.69 percent to close at 1,348.99. The blue-chip Euro STOXX 50 index .STOXX50E rose 1.89 percent to close at 3,091.54.

Some traders said the rally in Europe could be short-lived if European Central Bank chief Mario Draghi fails on Thursday to unveil new stimulus measures to spur growth in the struggling euro zone. Most euro zone bond yields edged up as investors questioned if the ECB can boost the region's flagging economy.   Continued...

U.S. one-hundred dollar bills are seen in this photo illustration at a bank in Seoul August 2, 2013. REUTERS/Kim Hong-Ji/Files