The new leaders of the US House of Representatives, the Democrats, are promoting an economic agenda that would put more money in the pockets of ordinary citizens and government, while leading to greater oversight of big business.
Democratic Representative Nancy Pelosi, who is in line to become speaker of the House of Representatives, has promised to fight early on in the next Congress to lower the price of prescription drugs available through Medicare, the federal health insurance program.
Efforts to curb military spending are also likely, political and financial analysts said, following an election whose outcome was influenced in large part by US voters' dissatisfaction with the handling of the war in Iraq.
PHOTO: AP
But with the two parties stalemated in the Senate, where it usually takes 60 votes to pass major legislation, the pharmaceutical and defense industries may find themselves beset more by unwelcome rhetoric in Congress than any hurtful changes in law. The Democrats won a slim majority with 51 of the Senate's 100 seats.
To be sure, few major changes in the corporate world are expected to result from Democrat-led initiatives over the next two years -- with the exception of a proposed increase in the minimum wage that may get substantial Republican support.
The long-term outlook for companies in the biotechnology and homeland security businesses may benefit, analysts said, from anticipated Democratic efforts to promote stem-cell research and inspect more cargo containers at ports. And the alternative energy sector could also get a boost.
But heightened scrutiny of other sectors, ranging from drugs to defense to hedge funds, could darken their prospects on Wall Street.
"The drug industry is on the top of the list of industries that would be uncomfortable if Democrats are successful in the elections," said Ira Loss, an analyst at Washington Analysis.
That is because Pelosi has promised legislation that would allow the government to negotiate directly with drug companies to purchase medicines for Medicare, a process the drug industry equates to price controls.
Shares of Pfizer Inc fell 43 cents on Wednesday to close at US$26.62 on the NYSE, where shares Eli Lilly & Co. declined by US$0.50 to US$56.48. Shares of Merck & Co fell US$1.56 to finish at US$44.34, mostly because of Merck's disclosure late on Tuesday that liabilities from tax disputes could total US$5.58 billion.
The Dow Jones industrials rose 19.77, or 0.16 percent, to 12,176.54. The blue chips closed above the record of 12,167.02 set on Oct. 26 and came within a few points of a record trading high of 12,196.32 reached on Tuesday.
Broader stock indicators also advanced. The Standard & Poor's 500 index was up 2.88, or 0.21 percent, at 1,385.72, and the NASDAQ composite index rose 9.06, or 0.38 percent, to 2,384.94.
Pelosi has pledged that Democrats would move to raise the minimum wage -- a policy change that could affect fast-food restaurants such as McDonald's Corp, as well as other retailers.
Ballot measures that mandate increases in existing state minimum wage laws passed in Arizona, Missouri and Montana, among other states. Alaska voters, meanwhile, helped protect the pockets of big oil by shooting down a proposal to increase drillers' taxes by US$1 billion a year.
Generally speaking, Democrats have said they will differ from Republicans by being tougher watchdogs of corporate wrongdoing and government spending and bigger defenders of consumers and labor unions.
Still, "there are not going to be wholesale changes in economic policy" because neither party has an overwhelming majority in either the House or Senate and this may explain the stock market's recent strength, according to Wachovia Securities economist Mark Vitner.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique