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Wall Street Welcomes Republican Election Victories

New York Stock Exchange (file photo)
New York Stock Exchange (file photo)
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Peter Fedynsky

With Republican Party candidates winning control of the U.S. House of Representatives in this week's midterm elections, some political observers are expecting gridlock in Washington.  But, a legislative stalemate in Congress might be good for American business.

Tuesday's elections will give Republicans majority control of the House of Representatives in January.

Columbia University political scientist Robert Shapiro says that could lead to stalled legislation as Democrats will maintain their Senate majority.

"Given the fact that with the kind of divided government we have, anything the Republicans try to do in the House will be thwarted by the Democrats in the Senate or in the end by Obama's veto pen," said Shapiro. "On the other hand, anything Obama or the Senate want to do can be readily thwarted in the House."


Traders at the New York Stock Exchange say the market began rising in September in anticipation of a Republican victories in Congress.

Cort Gwon, director of trading for FBN Securities, says political gridlock will help the market in the long run.

"How it's good for business is that the government really can't do much to change the business environment," said Gwon. "They can't really - can't really raise taxes; they can't really put new regulations because the Republicans control the House, so that's very good for business."

Joseph Greco, managing director of trade for Meridian Equity Partners, says the elections sent a signal that the government will not interfere in markets.

"The general consensus is we're not a one-way government at this point," said Greco. "As we know, typically, after a presidential election, midterms are usually more of a shake of the box to make sure the president doesn't have too much power."

Greco says the elections show that many Americans do not want the same answers to political problems recycled from previous administrations - Democratic or Republican.  He says what the government can and should do is improve the nation's infrastructure.

"That's going to need to be in the forefront of policy making and spending for the United States," said Greco. "It creates jobs; it creates technological innovation.  And it offers people who are entrepreneurial to go out and, you know, start these businesses that they grow and become new markets."

Greco says cooperation across Democratic and Republican Party lines in Washington can help the United States use its capacity for innovation as well as its human and financial capital to help avoid market volatility, create jobs and improve America's international position.  

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