How did markets respond to Romney's temporary surge in polling data?

How did the market respond to Romney's temporary surge in polling data? And which sectors of the economy expect to do better if Romney is elected? For the companies included in a survey, the share prices for all large banks and large health insurance and managed care providers rose when Romney's poll numbers unexpectedly surged, while prices for the companies in the telecommunications and technology sectors declined.

Share prices were mixed for the other sectors we looked at, such as pharmaceuticals, life sciences, oil and gas, suggesting investors do not see a major difference between an Obama or Romney victory.

Sector Weighted average share price changes, Oct 2 to Oct 11 (Change, relative to the S&P 500)
Banks, investment banks 4.03%
Insurance, including health insurance 3.80%
Defense 0.39%
Pharmaceuticals 0.20%
Oil and Gas -0.74%
Agriculture life sciences -1.34%
Telecommunications -1.92%
Software, computers and Internet -2.47%

Methodology

On October 3, Obama and Romney held their first debate, and Obama bombed, and did so badly, it changed the trajectory of polling data for weeks. I take this event as unanticipated by financial markets and ask the question, how did the debate change share prices in different industries? Put another way – when Romney's election prospects improved, did investors in particular industry sectors see this as a good thing or a bad thing, relative to the market as a whole?

To find out, I looked at companies with large market capitalization values in sectors that appear to be particularly sensitive to government regulation and tax policy, and looked at closing share prices on the day before the Denver debate, and seven days after the debate, on October 11. During this period Romney's poll numbers increased significantly, and the closing price for Romney's election on Intrade betting moved from 25.5 to 37.5, an increase of 47 percent.

For the market benchmark for large companies, I use the S&P 500 index, which traded at 1445.75 on October 2, and 1432.84 on October 11, a decline of .89 percent. (For the period, the US dollar declined in value against Euro, but only by .09 percent.)

The following table reports the company, market value, and the percentage change in share prices from the close of day on October 2 to October 11, relative to the overall decline in the S&P 500 of .89 percent.

Company or Index symbol Market Cap (billions of USD) Date of valuation Oct 2 Closing price: day before Denver October 3 debate Oct 11 Closing price, week after denver debate Change from Oct 2 to 11, compared to S&P 500
S&P 500, INDEXSP:.INX INDEXSP:.INX 1445.75 1432.84 -0.89%
Euro / US dollar exchange rate, not a factor after a week 1.2865 1.28766
Oil and Gas -0.74%
Exxon Mobil Corporation NYSE:XOM 411.54 11/3/12 91.72 91.17 0.29%
Royal Dutch Shell plc (ADR) NYSE:RDS.A 219.8 11/3/12 69.92 69.03 -0.38%
Chevron NYSE:CVX 212.64 11/3/12 117.96 113.06 -3.26%
BP plc (ADR) NYSE:BP 135.1 11/3/12 42.71 42.12 -0.49%
Banks, investment banks 4.03%
Wells Fargo & Company NYSE:WFC 178.21 10/31/12 34.82 35.18 1.93%
JPMorgan Chase & Co. NYSE:JPM 158.37 10/31/12 40.92 42.1 3.78%
Citigroup Inc. NYSE:C 109.65 10/31/12 33.26 35.52 7.69%
Bank of America Corp NYSE:BAC 100.44 10/31/12 8.93 9.34 5.48%
U.S. Bancorp NYSE:USB 62.43 10/31/12 34.08 34.39 1.80%
Goldman Sachs Group, Inc. NYSE:GS 58.68 10/31/12 117.25 121.99 4.94%
PNC Financial Services NYSE:PNC 30.79 10/31/12 63.94 64.95 2.47%
Pharmaceuticals 0.20%
Johnson & Johnson NYSE:JNJ 194.79 10/31/12 68.96 67.97 -0.54%
Pfizer NYSE:PFE 186.36 10/31/12 25.12 25.12 0.89%
Roche Holding Ltd. (ADR) PINK:RHHBY 165.85 10/31/12 48.05 48.43 1.68%
Merck NYSE:MRK 138.97 10/31/12 45.47 45.45 0.85%
Sanofi SA (ADR) NYSE:SNY 116.06 10/31/12 44.02 42.95 -1.54%
GlaxoSmithKline plc (ADR) NYSE:GSK 110.91 10/31/12 46.88 45.73 -1.56%
Abbott Laboratories NYSE:ABT 102.79 10/31/12 68.54 69.42 2.18%
Bristol Myers Squibb Co. NYSE:BMY 54.89 11/1/12 33.95 32.95 -2.05%
Big Defense 0.39%
United Technologies Corporation NYSE:UTX 71.64 10/31/12 78.39 76.05 -2.09%
Boeing NYSE:BA 53.12 10/31/12 69.53 70.83 2.76%
Lockheed Martin Corporation NYSE:LMT 30.31 10/31/12 93.16 92.72 0.42%
Halliburton NYSE:HAL 29.96 10/31/12 34.07 33.97 0.60%
Rolls-Royce Holding PLC (ADR) PINK:RYCEY 25.58 10/31/12 69.6 70.63 2.37%
General Dynamics Corporation NYSE:GD 24.04 10/31/12 67.3 65.59 -1.65%
Northrop Grumman Corporation NYSE:NOC 16.88 10/31/12 67.86 68.64 2.04%
Raytheon Company NYSE:RTN 18.66 10/31/12 54.75 54.88 1.13%
Medium size defense -2.45%
Textron Inc. NYSE:TXT 7.1 10/31/12 25.78 25.42 -0.50%
SAIC NYSE:SAI 3.76 10/31/12 11.81 10.98 -6.13%
Insurance, including health insurance 3.80%
UnitedHealth Group Inc. NYSE:UNH 57.83 11/1/12 56.8 57.66 2.41%
Wellpoint, Inc NYSE:WLP 19.93 11/1/12 60.46 62.79 4.75%
Cigna Corporation NYSE:CI 14.71 11/1/12 48.63 50.14 4.00%
Aetna NYSE:AET 14.61 11/1/12 40.7 43.29 7.26%
Humana, Inc. NYSE:HUM 12.01 11/1/12 72.71 75.33 4.50%
Large suppliers of drugs and medical technologies 3.99%
McKesson Corporation NYSE:MCK 22.02 11/1/12 86.39 89 3.91%
Cardinal Health, Inc. NYSE:CAH 14.01 11/1/12 39.64 40.91 4.10%
Small cap healthcare -4.80%
Health Net, Inc. NYSE:HNT 1.79 11/1/12 24.27 23.39 -2.73%
HealthSouth Corporation NYSE:HLS 2.12 11/1/12 23.99 22.19 -6.61%
Kindred Healthcare, Inc. NYSE:KND 0.52 11/1/12 11.84 11.2 -4.51%
Coke and Pepsi 0.08%
The Coca-Cola Company NYSE:KO 167.43 11/2/12 38.34 38.11 0.29%
Pepsico NYSE:PE 107.41 11/2/12 70.62 69.82 -0.24%
Agriculture life sciences -1.34%
Monsanto Company NYSE:MON 45.96 11/2/12 90.94 88.49 -1.80%
E I Du Pont De Nemours And Co NYSE:DD 41.51 11/2/12 49.5 48.78 -0.56%
Syngenta AG NYSE:SYT 35.21 11/2/12 76.21 74.27 -1.65%
Computers, Software and Internet -2.47%
Apple NASDAQ:AAPL 542.59 11/3/12 660.55 628.1 -4.02%
Google NASDAQ:GOOG 226.05 11/3/12 756.99 751.48 0.17%
Microsoft NASDAQ:MSFT 248.28 11/3/12 29.66 28.95 -1.50%
IBM NYSE:IBM 218.56 11/3/12 209.84 205.76 -1.05%
Oracle NASDAQ:ORCL 150.4 11/3/12 31.65 30.72 -2.05%
Facebook NASDAQ:FB 45.88 11/3 22.27 19.75 -10.42%
Telecommunications -1.92%
AT&T NYSE:T 199.35 11/3/12 37.81 36.26 -3.21%
Verizon NYSE:VZ 127.06 11/3/12 45.86 45.20 -.55%
Comcast NASDAQ:CMCSA 99.94 11/3/12 35.84 35.13 -1.09%