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.
‘CROWN JEWEL’: Washington ‘can delay and deter’ Chinese President Xi Jinping’s plans for Taiwan, but it is ‘a very delicate situation there,’ the secretary of state said US President Donald Trump is opposed to any change to Taiwan’s “status quo” by force or extortion and would maintain that policy, US Secretary of State Marco Rubio told the Hugh Hewitt Show host on Wednesday. The US’ policy is to maintain Taiwan’s “status quo” and to oppose any changes in the situation by force or extortion, Rubio said. Hewitt asked Rubio about the significance of Trump earlier this month speaking with Taiwan Semiconductor Manufacturing Co (台積電) chairman C.C. Wei (魏哲家) at the White House, a meeting that Hewitt described as a “big deal.” Asked whether the meeting was an indication of the
‘RELATIVELY STRONG LANGUAGE’: An expert said the state department has not softened its language on China and was ‘probably a little more Taiwan supportive’ China’s latest drills near Taiwan on Monday were “brazen and irresponsible threats,” a US Department of State spokesperson said on Tuesday, while reiterating Washington’s decades-long support of Taipei. “China cannot credibly claim to be a ‘force for stability in a turbulent world’ while issuing brazen and irresponsible threats toward Taiwan,” the unnamed spokesperson said in an e-mailed response to media queries. Washington’s enduring commitment to Taiwan will continue as it has for 45 years and the US “will continue to support Taiwan in the face of China’s military, economic, informational and diplomatic pressure campaign,” the e-mail said. “Alongside our international partners, we firmly
KAOHSIUNG CEREMONY: The contract chipmaker is planning to build 5 fabs in the southern city to gradually expand its 2-nanometer chip capacity Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday confirmed that it plans to hold a ceremony on March 31 to unveil a capacity expansion plan for its most advanced 2-nanometer chips in Kaohsiung, demonstrating its commitment to further investment at home. The ceremony is to be hosted by TSMC cochief operating officer Y.P. Chyn (秦永沛). It did not disclose whether Premier Cho Jung-tai (卓榮泰) and high-ranking government officials would attend the ceremony. More details are to be released next week, it said. The chipmaker’s latest move came after its announcement earlier this month of an additional US$100 billion
Authorities yesterday elaborated on the rules governing Employment Gold Cards after a US cardholder was barred from entering Taiwan for six years after working without a permit during a 2023 visit. American YouTuber LeLe Farley was barred after already being approved for an Employment Gold Card, he said in a video published on his channel on Saturday. Farley, who has more than 420,000 subscribers on his YouTube channel, was approved for his Gold Card last month, but was told at a check-in counter at the Los Angeles International Airport that he could not enter Taiwan. That was because he previously participated in two
RSS