NEW YORK - President Bush's victory in Tuesday's election is shaping up as a potential bonanza for Wall Street, where companies are salivating about the possibility that he will follow through on his pledge to allow private investment of Social Security funds.
A second term for the Republican president also makes it likely that drug makers can head off government-mandated price controls for now. The defense industry also looks like a winner, more regulatory victories may be in store for the Baby Bells and a new push for oil drilling in the Alaska wilderness is likely.
Though the privatization of Social Security has taken a back seat in this election, experts predict the president will work with congressional Republicans, who boosted their majority in both houses, on what would be the most dramatic changes in the government retirement program's 69-year history.
In addition, the president has gone on record as supporting an increase in medical savings accounts for individuals.
Banks, investment firms, mutual fund companies and insurers, of course, would offer to help individuals manage these new private retirement investments, which could lead to billions of dollars in new funds under their control and higher profits if legislation clears Congress.
"The Bush administration is more oriented toward what they call the "ownership society," said Ken McCarthy, the chief economist for vFinance Investments Inc. "If people are going to have more control over their assets, people are going to need advice on how to manage those assets, and that can only help the financial services industry."
That, in turn, will make financial stocks more attractive, analysts said.
Likewise, dividend-yielding stocks - a popular asset class in the uncertain market of 2004 - will continue to be a solid option. One of Mr. Bush's most popular first-term tax cuts was setting the dividend tax rate at 15 percent, rather than normal income tax rates of as much as 38.6 percent. That tax cut expires in 2008, but it's expected Mr. Bush will work to make it and many other tax cuts permanent.
"It's not coincidental that more and more companies are now raising their dividends. It's the first time where it's actually made sense from a tax perspective," said Hans Olsen, the managing director and chief investment officer at Bingham Legg Advisers.
In the end, however, after a trying year on the stock markets, most investors were simply glad to have the election decided.
Nam Y. Huh/Associated PressTrader Jeffery M. Silver works the S&P 500 Futures pit at the Chicago Mercantile Exchange as stocks surge into triple-digit gains early in the day after the general election, a reaction to a presumed victory by President Bush in the presidential election.
DRUG MAKERS: Status quo is good news for drug makers and investors in the stocks of companies such as Pfizer Inc. and GlaxoSmithKline PLC, which were facing tougher oversight on pricing under a Kerry presidency.
HEALTH CARE COMPANIES: Proposals by President Bush aren't likely to immediately slow the growth in health care spending for companies and their employees.
ENERGY: The president is likely to revive legislation that would allow private companies to search for energy sources on federal lands currently off limits to exploration and production. Such a move could benefit large petroleum producers.
FINANCIAL SERVICES: In addition to benefiting from Mr. Bush's proposals to privatize Social Security and health savings accounts, the nation's brokerage firms and asset managers could be aided by a rising stock market.
MEDIA: The Federal Communications Commission is likely to revisit its proposal to allow greater consolidation of media ownership.
DEFENSE AND TECHNOLOGY: Government technology spending will likely continue to be concentrated on defense and homeland security.
AUTOS: The combination of high oil prices and environmental concerns may force Mr. Bush to push for more aggressive measures on fuel economy. He already has proposed increased federal support for the development of advanced technologies such as hydrogen-fueled cars.
TELECOMMUNICATIONS: Mr. Bush's replacements for FCC Chairman Michael Powell and a Democratic commissioner whose term is up will ensure a continuing GOP majority.