"The Romney Rally": Fox Credits Debate Success For Rising Stocks
Fox Business anchors repeatedly suggested that today's stock market gains are due to perception of a Romney victory at last night's presidential debate, overlooking other crucial drivers of stock performance.
Throughout Markets Now, anchors and guests consistently credited rising stocks to a "Romney rally." From Markets Now:
The "Romney rally" talk continued throughout Fox Business' afternoon programming, emerging as the primary explanation of today's stock growth. Meanwhile, other important determinants of the stock market were rarely discussed, if at all.
According to a Bloomberg Businessweek article, today's rally could be attributed to a number of explanations unrelated to last night's debate, including better than expected economic figures and bullish stock market betting. From the article:
U.S. stocks rose as Labor Department figures showed applications for jobless benefits increased 4,000 to 367,000 in the week ended Sept. 29. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. Orders placed with U.S. factories fell 5.2 percent in August, the Commerce Department said. The median forecast of economists in a Bloomberg News survey called for a decline of 5.9 percent.
Some traders pointed to a bullish bet on the S&P 500 in the options market as helping to fuel today's rally. One investor bought 11,000 calls expiring tomorrow to buy the index at 1,465, 1 percent above yesterday's closing level, Chris Rich, head options strategist at JonesTrading Institutional Services LLC in Chicago, said in an interview. (Bloomberg Businessweek, 10/4/2012 )
CNBC additionally explained  that gains held throughout the afternoon due to the European Central Bank's freeze on interest rates at 0.75 percent.
While conservatives are quick to credit stock gains to the GOP's perceived pro-business agenda, even Fox Business acknowledges that Democrats have the historical advantage  in the stock market. Furthermore, stock rises during election years tend to favor incumbents, providing a potential edge for President Obama. From a CNBC.com article published earlier this year:
Historically, moves higher in the market usually mean the incumbent president is likely to win, while sell-offs simply indicate the challenger is favored, according to research from S&P/Capital IQ.
"The recovering market would be a sign that the perceived anti-Wall Street policies of the current administration will soon come to an end, as the incumbent would be replaced and that a plurality on the Potomac might even return as a result of the early November outcome," [Sam Stovall, chief equity strategist at S&P] added. "Unfortunately for these presumptive prognosticators, history indicates, but does not guarantee, that the opposite has usually been true."
The trend, Stovall said, has been accurate 82 percent of the time over the past century. (CNBC, 7/30/2012 )
Of course, pegging stock market gains on the GOP is nothing new at Fox. Previous Media Matters research  outlines the conservative media's continued attempts to further a right-wing agenda through inaccurate stock analysis.