(Bloomberg) -- U.S. stock futures jumped as Hillary Clinton's prospects in the presidential election likely improved after FBI Director James Comey said in a letter to Congress the agency is sticking to its conclusion that her handling of e-mails wasn't a crime.
December contracts on the S&P 500 Index surged 1.4 percent to 2,108.25 at 6:50 p.m. in New York. The cash index fell 0.2 percent Friday to cap a ninth straight slide that's erased $725 billion in value from U.S. equities. Dow Jones Industrial Average futures added 199 points to 17,999.
“The immediate reaction shows that the market is viewing the latest Hillary Clinton news as a positive, at least in the short term,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said by phone. “It may still be a close call in the end, but the market for the time being is acting as if some of the uncertainty is gone.”
Comey roiled the presidential race and sent equity markets tumbling Oct. 28 when he informed Congress that the Federal Bureau of Investigation was examining new e-mails potentially related to its review of Clinton's use of a private server. While the agency had determined in July that no prosecutor would pursue criminal charges in the case, the latest e-mails sparked a fresh FBI review.
“During that process, we reviewed all of the communications that were to or from Hillary Clinton while she was Secretary of State,” Comey wrote to Congress Sunday. “Based on our review, we have not changed our conclusions that we expressed in July with respect to Secretary Clinton.”
American stocks have shown themselves sensitive to Clinton's presidential prospects, with futures rising in September during the first debate she was widely considered to have won. The S&P 500 tumbled about 20 points in 40 minutes after Comey's first letter was made public, and has slumped every day since, as polls showed the race tightening. Clinton maintains about a 2.2 percentage-point lead, according to an average of polls by RealClearPolitics.
Signs of rising apprehension over the election's outcome mounted last week among investors still smarting from being caught wrongfooted after the U.K. referendum on European Union membership. The CBOE Volatility Index pushed its advance to 73 percent over nine days in the longest climb on record, while investors pulled the most money in three weeks from an ETF that tracks the S&P 500. Hedge fund manager Dan Loeb said he's cutting risk from his portfolio ahead of the Nov. 8 vote.
The S&P 500 Index has advanced in the five days before the vote in 20 of the past 22 cycles, according to data compiled by Bloomberg and Bespoke Investment Group LLC. While the gauge has climbed an average 1.9 percent in the run-up to elections going back to 1928, it's down 1.9 percent since Monday, with one market day left until polls open Nov. 8.
An FBI spokesman declined to elaborate Sunday on Comey's letter, which didn't address what number or mix of personal correspondence, previously disclosed federal records and new government work messages were found on a computer belonging to former Representative Anthony Weiner, estranged husband of long-time Clinton aide Huma Abedin.
“This is a relief because the market was worried that should she be elected there would be a prolonged overhang in her first 100 days in office,” Kevin Kelly, chief investment officer at Recon Capital Advisors LLC, said by phone. “The uncertainty of her fighting an investigation would hamper any fiscal policies that she would try to enact. That's lending credence to the market that should she be elected there will be no more investigative overhang.”
To contact the reporters on this story: Joseph Ciolli in New York at jciolli@bloomberg.net, Oliver Renick in New York at orenick2@bloomberg.net. To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, John Shipman
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