The New York Stock Exchange opened for business today for the first time ever during a presidential election, but the stock market was more interested in interest rates than in politics.
After all, the market knew who was going to win.
About the only surprise here today was how many people showed up. The stock exchange floor bustled just as much as usual, even though trading was being conducted there for the first presidential Election Day since the exchange was founded 193 years ago. (The exchange began opening on off-year election days in 1970.)
Because yesterday was a holiday for much of the business world, many of Wall Street's old hands had expected business to be slow. But more than 100 million shares were traded, and the Dow Jones industrial average closed at its highest level since January. It rose 14.91 points to close at 1244.15.
The New York Stock Exchange composite index rose 0.98 point to 98.12. Standard & Poor's index of 400 industrials rose 2.11 points to 191.48, and S&P's 500-stock composite index was up 1.83 points to 170.41.
The American Stock Exchange market value index gained 2.04 points to 213.47, while the Nasdaq composite index for the over-the-counter market closed at 250.54, up 2.13 points.
Analysts ascribed the rally to the market's belief that the Federal Reserve Board is encouraging lower interest rates. There was doubtlessly some happiness with the anticipated Reagan victory, as well, but analysts said the market had discounted it -- that is, reacted to it -- weeks ago.
Reagan was a heavy favorite on the floor of the exchange, which likes a sure thing whenever it can find one. Big Business -- and no business is bigger than the stock market -- is, according to the stereotype, among Reagan's biggest boosters, and conversations with traders produced no reasons to retire that cliche. Reagan stickers were scattered around the booths and trading desks of the floor, and an unscientific poll of buttons worn by traders showed five touting the Reagan-Bush ticket, one for Mondale, two for "Ghostbusters" and one for Eisenhower.
The stock exchange's leaders say that they decided to open for business on Election Day because of the increasingly international nature of the market: Business elsewhere doesn't stop just because the American people are choosing a new leader, so why should it stop at the NYSE?
"The exchange is a customer-driven institution in the 1980s . . . We're here to service the customer, and the member base wants to keep the market open," said John Lyden, a trader for Robb Peck McCooey Specialist Corp. and an NYSE director.
Still, there were some fears that news reports and preliminary election returns could cause great market shifts, especially in an arena with an appetite as voracious for rumors as the NYSE.
"There's no question that, if at 3 o'clock this afternoon you heard rumors that, based on exit polling, you have a closer election than anybody thought, you'd have volatility in the market," Lyden said.
However, volatility is what the stock market seems to thrive on, so the market probably would just ride out the rumors, he added. "To say that you don't want to be open because you'd have volatility is not in the 1980s" attitude, Lyden said. "I'm sure that, by 12:30 today, every member firm will be glad that they're open."
Given the day's surprisingly heavy volume, that probably was the case -- that kind of volume is good for the brokerage business. And many on Wall Street had expected a much slower day.
"The big surprise is the big volume today," said Newton Zinder, a market watcher for E. F. Hutton. "I had expected 50 million shares . I had hoped that there would be 20 million shares today so we could go back to having it as a holiday."
The biggest question left by the end of the day was how large the Reagan victory would be. With much of the price run-up coming in the last few minutes of trading, it might have seemed that the market was closing with a flush of optimism about the prospects for a Reagan landslide -- although a historical study done by a legendary market chartist named Yale Hirsch, who has even found ways to link market performance to the winner of the Super Bowl, found that presidential landslides usually lead to steep drops in the market in the months after the election.
"We're talking mandates here," said Larry Wachtel, an analyst for Prudential Bache Securities. Wachtel even suggested that the market would suffer if Reagan did not, as expected, win big. Wachtel said that a narrow victory, coupled with a mediocre performance by the Republicans in congressional races, could lead to a stock market sell-off. "Maybe he'll be president of the United States, but in Wall Street parlance, that's defeat," Wachtel said.
On the stock exchange floor today, however, the talk was certainly not of a Reagan defeat. Except, of course, as a joke.
"Somebody must have heard Mondale's winning," E. F. Hutton trader Pat Marchese said, looking at a price quote in mock horror. "They're selling.
"Just kidding," he added.