Standard & Poor's chief investment strategist, Sam Stovall, came out Friday against polarized political posturing in Washington—a notable event considering his employer's threat to downgrade U.S. debt if the debt-ceiling debate goes unresolved after Aug. 2.
While many people believe that gridlock is good for the stock market, reasoning that Washington would then not get in the way of capitalism, history shows that the opposite is true, says Stovall (left) in a U.S. sector watch for S&P's Equity Research unit.
"From Dec. 31, 1899 through July 28, 2011, the average annual price advance for the S&P 500 during years when Congress was split was less than half that of when the President and Congress were from the same party," Stovall notes.
