Infrastructure Stocks Tumble, Seen as ‘Key Casualty’ of Election
(Bloomberg) -- Construction-related stocks tumbled as the close U.S. elections stirred fears that political gridlock would block an increase in infrastructure spending.
Vulcan Materials Co., Martin Marietta Materials Inc. and United Rentals Inc. were among the 10 worst performers in the S&P 500 Index in late-morning trading. The outlook for more investment in public works is “probably the key casualty” of the vote, Jefferies analyst Stephen Volkmann said in a note to clients.
“While Republicans have also spoken supportively about infrastructure, funding remains a key issue,” he said in the report. “Particularly if Democrats take the presidency, we would expect a Republican Senate to recover its conservative fiscal focus.”
With no “blue wave” sweeping Democrats to unified control of Congress, the outlook for a big boost in infrastructure is fading, Jefferies analyst Philip Ng said in a separate report. That’s true whether President Donald Trump retains the White House or Democratic challenger Joe Biden ekes out a victory, with several key states yet to be decided.
Vulcan Materials, a supplier of building aggregates such as sand and gravel, dropped 6.9% to $139.84 at 11:37 a.m. in New York. Rival Martin Marietta slid 5.7% to $260.42. United Rentals, which provides construction and industrial equipment, declined 6.1% to $189.08. At their lowest for the session, all there were down the most intraday since March.
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