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Wall Street surges as FBI clears Clinton on eve of election

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On the eve of the U.S. presidential election, the Dow was up more than 300 points Monday after FBI director James Comey said the agency is not recommending criminal charges against Democratic nominee Hillary Clinton over her emails. The broad market looks on track to break a nine-day losing streak, Wall Street’s longest in 36 years, as investors again start to price in their base case of a Clinton win and split Congress. In a letter to lawmakers Sunday, Comey said the FBI is standing by its original findings, made in July, that Clinton should not be prosecuted for her handling of classified information over email as secretary of State. Comey, of course, had roiled the financial markets back on Friday, Oct. 28, when he sent a letter to Congress saying he was reviewing more emails tied to Clinton found in an unrelated case.

The S&P 500 was up more than 40 points, or 2.1%, and on track to snap a nine-session losing streak, its longest skid since December 1980. The losing streak was caused in part by a tightening in the polls, as Wall Street had been pricing in a Clinton win before Trump’s surge in the polls. The broad index has wiped out two-thirds of its losses it suffered in nine-session swoon. The Dow Jones industrial average was up more than 340 points, or 1.9%, in afternoon trading and the Nasdaq composite was 2,3% higher.

Investors around the globe responded bullishly to news that the FBI investigation related to Clinton’s emails was over, as they interpreted the news as boosting Clinton’s chance to win the tight election race with Republican challenger Donald Trump as well as clearing a legal hurdle for Clinton in the event that she does prevail tomorrow on Election Day. Clinton is viewed as a more status quo candidate and, therefore, more palatable to Wall Street. Trump, who is more  unpredictable, is viewed less market-friendly by investors as it is hard to get a good handle on what a Trump administration might look like and how his views on trade would impact asset prices around the world.

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