Election Over, Eyes Turn to Rates By Dan Burns NEW YORK (Reuters) - With the U.S. presidential election finally over, stock investors won't get much of a break next week as they face the next big obstacle -- higher interest rates. A better-than-expected employment report on Friday fueled expectations that the Federal Reserve will raise rates not once -- but twice more by the end of the year. Many believe more hikes will come early in the new year. The Fed's rate-setting body, the Federal Open Market Committee, meets Wednesday to decide on the latest expected increase in the benchmark federal funds rate, forecast by most economists to go up a quarter percentage point to 2 percent. It would be the fourth rate increase this year. While that is usually considered a bad thing for stocks, in part because it raises borrowing costs for companies and consumers, some analysts expect more momentum in the market's rally on the re-election of President Bush. "I would guess it is going to continue," said Alexander Paris, president of Barrington Research. "Absent the jobs growth, I would have said you have the initial post-election rally, then it would cool and then you would start looking at the economic numbers. I think it is going to continue into next week." Stocks surged through the end of the week after it was confirmed on Wednesday that Bush had defeated Democratic challenger, Sen. John Kerry, to earn a second term in the White House. As encouraged as they were by the result -- the market views Bush as the more pro-business of the two -- investors were particularly relieved not to have had a repeat of the 2000 race, when voting irregularities in Florida left the result in doubt for weeks. "The fundamentals in the market haven't changed significantly," said David Legeay, senior vice president and director of portfolio management at McDonald Financial Group. "So I think this is more a relief rally, or a psychological rally, than based on fundamentals in the market -- although I was encouraged by the jobs number." "The consumer is still the big question mark in all of this and retail numbers have been a bit soft heading into the Christmas season," Legeay said. The Dow Jones industrial average ended Friday at 10,387.54, up 3.6 percent for the week, its best one-week performance since March 2003. Meanwhile the Standard & Poor's 500 index hit its highest mark since March 2002, closing the week up 3.2 percent at 1,666.17, and the Nasdaq Composite Index rose 3.2 percent for the week to finish at 2,038.94. On Friday, the Dow and Nasdaq posted their highest closes since early July.     Continued ... Quelle "Election Over, Eyes Turn to Rates" : reuters.com Main page for "Election Over, Eyes Turn to Rates"