Stocks Rise on Hope of Bush Presidency
Election anticipation filled Wall Street yesterday, as pharmaceutical and tobacco stocks rose slightly on the faith that Texas Gov. George W. Bush (R) will become the next president and the industries will "escape" price restrictions and litigation, Bloomberg News/New York Times reports. Bush's slight lead over Vice President Al Gore in the polls is celebrated by drug giants, who say that Gore's proposed Medicare prescription drug benefit will "force" price reductions on their products (Bloomberg News/New York Times, 11/7). Pharmaceutical Research and Manufacturers of America spokesperson Jeff Trewitt said, "We have concerns about the vice president's proposal for Medicare drug coverage. Medicare has a history of slapping on price controls." Rebecca Perkins, spokesperson for pharmaceutical association HealthCare Institute of New Jersey, added, "If Wall Street concluded that (price controls) were a possibility, investment would slow down" (Lynn, Bergen Record, 11/7). Thus far, drug investments have hardly slowed: While the rest of the market "ended mixed" yesterday, Pfizer shares rose by a $1 to $44.50, Merck shares ascended $2.25 to $89.88, and Eli Lilly gained $1.50 to $89.56, as the Amex pharmaceutical index increased 1.9%. On the tobacco front, Philip Morris shares rose 13 cents to $34.88. Bush has pledged to not pursue the government's lawsuit against Big Tobacco if elected. "There's an assumption that Bush will be elected, and there's some buying in advance of that," Joseph Stocke of StoneRidge Investment Partners said (Bloomberg News/New York Times, 11/7).