Daily Data Flow: Stocks Rise on Rumors; Election Intrigue

Stocks Rise as Dollar, Treasuries Drop Amid U.S. Voting (Bloomberg)
U.S. stocks and commodities rallied for a second day, while the dollar and Treasuries fell, as investors awaited presidential election results. Australia’s dollar rose as the central bank left interest rates unchanged. “We’re moving closer to a definition on the election front,” said Mark Luschini, who helps manage $54 billion as chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC. “It’s offering investors reason to say, ‘we move from the unknown category regardless of the outcome.”

Behind Election Day Rally: ‘It’s Running on Rumors’ (CNBC)
Stocks posted a big election day gain, fueled by relief that the uncertainty around the presidential election will end — but also on sprigs of hope that Mitt Romney might win. “The uncertainty is over. We love to rally on election day. We’ve done it in the past,” said Daniel Clifton, head of policy research at Strategas. “But in the sector side, you see the hospitals selling off and you see all the Republican sectors pretty much up and people are making a bet.” Clifton said he expects Obama to win but there’s chatter on the Internet and rumors are flying that the GOP challenger is doing better than expected.

Hedge Funds Down for First Time Since May but Outperform S&P (Reuters)
Hedge funds lost money for the first time since May last month. The performance was hurt by exposure to the broader stock market, which also sank in October. On average, hedge funds fell 0.34% in October, according to a group of early-reporting managers to hedge fund tracking firm eVestment|HFN, while the S&P500 fell 1.85% during the month. Hedge funds are up about 2.8% for the year, while the S&P500 has recorded gains of about 14.3%. Losing strategies in October included those that specialize in investing in commodities and managed futures, “in step with the extensive declines across the commodity price spectrum, and with strength in the euro vs U.S. dollar,” eVestment said in its statement.