By James Langton

(November 7 – 19:00 ET) – Markets in the United States closed slightly negative lower today, with traders showing no consensus on the day’s elections.

Looking strictly at the presidential race, the pundits suggest that a Bush victory would be good for drug and oil stocks, and there is some suggestion that Bush may discontinue the anti-trust action against Microsoft Corp.

Although a more pro-business climate is expected under a Republican administration, a Gore victory would not likely lead to a selloff either. A few market observers suggest that some of Gore’s more anti-business stances are electioneering rhetoric and little else. At the same time, his promise to pay down the deficit, as opposed to spending budgetary surpluses on a tax cut, as Bush promises, would likely be a positive for the economy overall, if not for rich individuals.

Merger and acquisition pundits say they would prefer Bush because he would likely bring a more predictable posture to the Department of Justice, making merger approvals easier to gauge.

The worst case scenario, pundits say, is a split of the electoral college and popular vote results. The most likely outcome here being a Bush victory in the vote, with Gore taking the electoral college. In which case Gore would get the White House. Given the tight race, one analyst puts this possibility at 20%, suggesting that this would seriously shake market confidence.

The other factor is the party affiliation of Congress. Markets prefer gridlock between the Congress and the White House, keeping either party from getting too ideological. Current market wisdom sees a short-term rally on a Bush win, a short-term sale of a Gore win, with the long-term conclusion that it doesn’t much matter whichever candidate wins.