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Thursday, 24 May, 2001, 21:32 GMT 22:32 UK
US investors act on Jeffords move
Senator Jim Jeffords
Senator Jeffords has almost certainly derailed some of President Bush's agenda
US investors on Thursday signalled how they thought a power shift in the Senate would play out in corporate America.

Pharmaceuticals and oil stocks were some of those marked down after Jim Jeffords, a Republican senator from Vermont, announced he was leaving the party.

His departure hands control of the Senate to the Democrats - something investors viewed as likely to impede the passage of President George W Bush's proposed legislation on issues including energy, health care, missile defence and tax cuts.

President Bush's plans to reform health care, ease environmental restrictions on industry and open an Alaskan wildlife preserve to oil exploration had previously been viewed as positive for pharmaceutical and energy companies.

Shares in Merck & Co fell $1.50 to $72.50 while fellow drug giants Pfizer and Johnson & Johnson lost 63 cents to $42.92 and 28 cents to $97.45 respectively.

Oil companies including Texaco and Chevron were also modestly lower.

Greenspan address

Analysts said many investors had also trod cautiously during the day, ahead of an address on the economy by Federal Reserve chairman Alan Greenspan to the Economic Club of New York.

The address - which will be the first time Mr Greenspan has spoken publicly on the economy in three months - was scheduled for 0020 GMT.

Some commentators have speculated he will say the worst of the US economic slowdown is over and the world's largest economy will escape recession.

The Dow Jones industrial average ended the day at 11,122.42, up 16.91 points or 0.15%.

The Nasdaq composite closed at 2,281.74, up 38.26 points or 1.71%.

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See also:

24 May 01 | Americas
Rebel tips US Senate balance
24 May 01 | Americas
Q&A: What the Senate switch means
22 May 01 | Americas
Bush argues for urgent tax cuts
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