Tech and health care lead US stock surge after midterms

Stocks got a post-election bump Wednesday. AP/Richard Drew

Tech, health lead US stock surge

NEW YORK — Stocks rallied Wednesday as investors were relieved to see that the U.S. midterm elections went largely as they expected they would. Big-name technology and consumer and health care companies soared as the S&P 500 index closed at its highest level in four weeks.

It's not clear how the divided Congress will work with Republican President Donald Trump, but if the possibilities for compromise and big agenda items seem limited, Wall Street is fine with that because it means politics is that much less likely to crowd out the performance of the strong U.S. economy.

"The market likes when what it expects to happen happens," said JJ Kinahan, chief markets strategist for TD Ameritrade. "We haven't had that happen in a little while, when you think about major events like Brexit or the presidential election."

Historically markets have performed well after midterm elections and with split control of Congress.

Stocks are off to a strong start in November, and the S&P 500 is up 3.8 percent so far this month. That follows a swoon in October that knocked the S&P 500 down nearly 7 percent as investors worried about rising interest rates and the U.S.-China trade dispute.

Consumer borrowing up solid $10.9B

WASHINGTON — Americans increased their borrowing by a solid amount in September. But the gain was less than half the big August surge as borrowing in the category that includes credit cards fell.

Consumer borrowing rose by a seasonally adjusted $10.9 billion following a jump of $22.9 billion in August, the Federal Reserve reported Wednesday. The August gain had been the strongest increase in nine months.

The September advance was below economists' expectations for a $16.5 billion gain. The category that covers auto loans and student loans rose a solid $11.2 billion. The category for credit cards fell by $311.6 million after having risen $4.6 billion in August.

Consumer borrowing is closely tracked for signs of consumers' willingness to take on more debt to finance their purchases.

Consumer spending accounts for 70 percent of economic activity and has been especially important in driving growth in recent months. The economy, as measured by the gross domestic product, grew at an annual rate of 3.5 percent in the July-September quarter, helped by the biggest burst in consumer spending in nearly four years. That GDP gain followed an even faster 4.2 percent growth rate in the second quarter of this year.

With unemployment down to 3.7 percent, the lowest level in nearly five decades, and consumer confidence high, analysts believe consumer spending will continue to provide a strong underpinning for growth.

The September rise in borrowing, which was a 3.3 percent increase at an annual rate, pushed consumer credit to a fresh record of $3.95 trillion.

The Fed's consumer borrowing report does not cover home mortgages or other types of debt secured by real estate such as home equity loans.

Fintech service may hurt payday loans

NEW YORK — Financial technology company Even shared data exclusively with The Associated Press that showed that its users were less likely to use payday loans once they signed up for the service. Even allows its users to take advances on their next paycheck while not charging them any interest.

The company made headlines last year when Wal-Mart, the nation's largest private employer, announced it was signing its employees up for Even as part of its benefits package.

China reserves suggest yuan being propped up

BEIJING — China's foreign currency reserves declined in October, suggesting Beijing might be intervening in markets to keep its yuan's politically sensitive exchange rate from falling too far against the dollar.

Central bank data showed the reserves fell by about $34 billion to just over $3 trillion. It was unclear how much of that was due to sales of dollars to support the yuan, but Chinese authorities have promised not to depress the yuan to help exporters who face U.S. tariff hikes.

Banks may face more scrutiny under Waters

NEW YORK — With Democrats taking control of the House of Representatives, Rep. Maxine Waters, who has called for more regulation of banks, is expected to become chairwoman of the powerful House Financial Services Committee, the committee that oversees the nation's banking system and its regulators.

Waters is no friend to the nation's biggest banks and Wall Street, and has been a vocal critic of President Donald Trump and his administration. She has called for more regulation of banks, and has opposed Trump's political appointees moving to roll back regulations on banks and other financial services companies

Smartphone makers bet on foldable screens

SAN FRANCISCO — The smartphone industry has been searching for a breakthrough to revive a market mired in an innovation lull. A potential catalyst is coming with the introduction of phones featuring flexible screens that can be folded in half without breaking.

On Wednesday, Samsung provided a glimpse at a foldable-screen device that it will release next year. But it's unclear whether the flexibility will have mass appeal, especially when the bendy devices are expected to cost more than $1,000.

German gov't advisers slash growth forecast

BERLIN — The German government's panel of independent economic advisers has cut its growth forecast for this year, citing a tougher foreign trade environment, among other issues.

The five advisers on Wednesday predicted growth of 1.6 percent this year in Europe's biggest economy, down sharply from the 2.3 percent they forecast in March. They predicted an expansion of 1.5 percent next year, down from 1.8 percent.

In their report, they noted that the German economy is in one of its longest upswings since World War II but wrote that "a less favorable foreign trade environment, temporary production issues and capacity bottlenecks are slowing the pace of expansion."

Last year, gross domestic product grew 2.2 percent, Germany's strongest performance in six years. The government last month forecast 1.8 percent growth for 2018.

Germany is one of South Carolina's largest trading partners.

Wire reports