So much for uncertainty being bad for stocks. The S&P 500 Index (^GSPC -0.38%) surged up 74 points, or more than 2.2%, on Nov. 4 even as the U.S. presidential election results remain unsettled. Today's big move higher is largely due to huge gains for tech and healthcare stocks. The five best-performing S&P stocks today were all in the healthcare industry, with Biogen (BIIB 1.70%) leading the way, up 44% on news about a potentially breakthrough drug. Shares of Cigna (NYSE: CI), Eli Lilly (LLY -1.51%), Anthem (NYSE: ANTM), and UnitedHealth Group (UNH -1.12%) also moved up by 10% or more today.
While tech stocks may not have surged by double digits, the broad gains by the biggest tech stocks were enough to move the market. Shares of Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Microsoft (MSFT -3.09%), and Facebook (NASDAQ: FB) all gained more than 4.8% on the day.
Biogen Alzheimer's drug, no "Blue Wave" drive big gains for healthcare stocks
Drugmaker Biogen gave investors a big surprise on word that its aducanumab drug was going to be submitted to the FDA for approval. The FDA has scheduled a key meeting for later this week, with some indication of a favorable outcome. If approved, this could prove a blockbuster drug for Biogen for many years to come. The number of Americans over 80 is on track to double from 2010 to 2030, with similar trends in other western countries expecting to sharply increase the number of people with Alzheimer's disease.
For Cigna, Anthem, and UnitedHealth, today's surge is at least partly the result of expectations that a "Blue Wave" in Congress isn't likely to occur. While Democrats could gain some seats in the Senate, and the odds at this writing favor former Vice President Joe Biden to win the White House, it's looking very unlikely the party will come out of elections with a commanding majority that it would need to accomplish its full legislative agenda, including healthcare regulations that could be bad for insurer's profits.
Tech stocks surge on perception of safety
The tech and telecom sectors (which include giants Facebook and Alphabet) have proved to be some of the biggest gainers in 2020, in part since many have shown themselves to be both resilient and somewhat immune to the financial impacts of the coronavirus pandemic.
While the occupant of the Oval Office come January has yet to be decided, and the final numbers in the Senate remain unclear, today isn't as uncertain as it may seem. The same factors -- particularly a potentially still-divided Senate -- that are likely to prove good for health insurer's bottom lines also give investors a reason to look up.
For tech stocks, the basic idea is this: Further economic stimulus may not happen quickly, and it may not be as generous as a Democrat-controlled federal government would have delivered. But so far, most tech stocks have proved they don't need financial support to prosper in the current economic environment. Moreover, many tech stocks have actually benefited from remote work and social distancing.