November 05, 2012-Stocks Look to a Flat Start on Election Uncertainty

After ending last week's trading roughly flat following a sell-off on Friday, stocks may show a lack of direction in early trading on Monday. The major index futures are currently pointing to a roughly flat open for the markets. Uncertainty about the outcome of Tuesday's presidential race between President Barack Obama and Republican challenger Mitt Romney is likely to keep some traders on the sidelines. In the short-term, investors will be looking for a definitive outcome from the election, as a race that is still too close to call or requires a recount will add to the uncertainty on Wall Street. Looking further ahead, a win for Obama is expected to be good news for the alternative energy, telecom, and housing sectors, while a win for Romney could benefit the defense, resource, and financial sectors. Along with the outcome of the presidential race, traders are also likely to keep an eye on which party controls the House and the Senate following the elections. While trading activity may remain subdued ahead of the elections, trading could be impacted by the release of the Institute for Supply Management's monthly report on service sector activity.