Subscribe to Money Magazine
Markets & Stocks

Wall Street no fan of Edwards
Traders, favoring Bush team, dislike Edwards as VP but don't register displeasure -- yet.
July 6, 2004: 1:27 PM EDT
By Mark Gongloff, CNN/Money senior writer

NEW YORK (CNN/Money) - Democratic presidential candidate John Kerry's choice of a running mate may just help him win the election in November, and that could make Wall Street very nervous.

A Kerry-Edwards administration would most likely lead to ...
  More jobs
  Higher taxes
  A larger deficit
  A balanced budget

   View results

Tuesday morning, Sen. Kerry, D-Mass., chose Sen. John Edwards, D-N.C., to run with him for the White House.

Edwards was seen by most Democrats -- and by some political analysts -- as a natural choice: a young, energetic campaigner from the deep south, a counterweight to Kerry's staid, New England demeanor. In a tight race with President Bush, every little edge could help.

"I thought all along Edwards was the logical choice," said Greg Valliere, political economist for Schwab Washington Research. "He's so talented as a campaigner, and he brings a lot of enthusiasm, sex appeal and pizzazz to the ticket."

"From a market standpoint, I think this would reinforce the view that Kerry could win," he added.

And Wall Street is probably not too thrilled about that; stock investors have grown to expect policies from the Bush administration that are friendly to businesses and to investors.

What's more, Edwards spent much of his campaign for president last year and early this year taking a populist stance that veered at times into protectionism, according to some critics.

And Edwards is a former plaintiff's trial lawyer, which could lead Wall Street to fear a potential Kerry presidency would be unfriendly to tort reform.

John Edwards

Tom Donohue, president of the U.S. Chamber of Commerce, has told the Wall Street Journal he would work to defeat a Kerry-Edwards ticket, and other business leaders reacted with disdain to Kerry's pick.

"As a trial lawyer, Edwards brings to his job an inherent bias against innovation and the American entrepreneurial spirit that is essential to compete and create jobs," Jerry Jasinowski, president of the National Association of Manufacturers, said in a statement.

For his part, Edwards has proposed some measures to keep plaintiff's lawyers in check, including a requirement they vet any potential lawsuits and certify their worthiness before filing.

Individual investors warming to Kerry?

On the other hand, one of Kerry's other finalists for the VP slot, Missouri Rep. Dick Gephardt, a long-time ally of organized labor, may have been even more unpalatable to Wall Street than Edwards.

John F. Kerry
John Edwards
Financial Markets
George W. Bush

"Earlier this morning, the rumored news was that it would be Gephardt, and I think the markets would have had a little tougher time digesting that, especially with his [long-held] protectionist stance," Yra Harris, partner at Cadent Financial, told CNNfn. "They would have viewed that as a bigger negative."

And, while Wall Street is persistently Republican, a survey of individual investors earlier this year found many warming to Kerry. And stocks have historically done better under Democratic presidents.

In any event, the election is still about four months away, an eternity in political terms, so few money managers are likely juggling their portfolios due to Kerry's VP choice yet -- even if they dislike it.

Wall Street had bigger fish to fry Tuesday morning.

That's because oil prices rose again, software firm Veritas warned on second-quarter profit, Lehman Bros. cut its rating on the semiconductor sector and worries have mounted about a slowdown in economic and earnings growth.

"I don't know that money managers controlling billions of dollars are going to make major choices based on this minor development," said Larry Wachtel, market analyst with Wachovia Securities.

"[Tuesday's] trading will be drab because of meat and potatoes issues, not a Kerry/Edwards combo."  Top of page

  More on MARKETS
Why it's time for investors to go on defense
Premarket: 7 things to know before the bell
Barnes & Noble stock soars 20% as it explores a sale
7 things to know before the bell
SoftBank and Toyota want driverless cars to change the world
Aston Martin falls 5% in its London IPO

graphic graphic