Report of Kerry lead
scares stock market

Traders on Wall Street this morning attributed a sharp reversal in stocks to early exit surveys that show Kerry doing well at the polls.

“The only thing I can see is that the Drudge Report shows the preliminary exit polls showing Kerry within striking distance,” Jay Suskind, director of trading of Ryan, Beck & Co., told CBS MarketWatch.

News of an early Kerry lead caused a “sort of panic,” said Peter Boockvar, and equity strategist with Miller Tabak.

“We had this pre-election rally and the election is almost over,” he told CBS. “It’s almost a sell on the news now that we’re actually here.”

The latest report showed the Dow Jones Industrial Average down 20 points at 10,034, eliminating an 80-point gain earlier in the day.

Judging by activity on Internet weblogs, early exit polls showing Kerry with a one-point lead in the crucial states of Ohio and Florida have cheered the Massachusetts senator’s campaign and made some supporters of President Bush nervous.

After National Review Online’s “The Corner” reported the exit-survey news, for example, an angry reader wrote: “The amount of morale damage you did with the Republican forces across the country is immeasurable. … As soon as your post went up, a few people just in the corner of the building where I work came over, one person almost in tears. You should be very proud of yourself.”

On Wall Street, Lisa Hansen, head trader at Transamerica Investment Management, told Reuters: “apparently the blogs are saying that Kerry is ahead in one or two of the swing states and that’s why the market dipped.”

But political analysts caution that exit polls taken in the first hours of voting are notoriously unreliable, pointing out that early surveys in the 2000 election showed Gore leading in states eventually won by Bush.

Gore was up three points in early exit polls in Florida, for example.

Also, today’s exit surveys were based on an unrealistic 59-41 ratio of women to men, according to Drudge.

Zogby International now is predicting Ohio and Florida will go to Bush, but says the general election is too close to call.

The majority of pre-election opinion polls showed a slight edge for President Bush.

Voters appear to be turning out in record numbers, with possibly as many as 121 million Americans casting their ballots for president by the end of the day, according to officials.