Stocks rise Tuesday as investors hope for GOP election sweep
NEW YORK (AP) — Investors expecting a big Republican Election Day victory celebrated in advance with a buying spree Tuesday, giving the Dow Jones industrials a triple-digit gain and lifting technology stocks out of a slump.
The Dow and Standard & Poor's 500 index locked in a three-day winning streak, while the Nasdaq composite index had its fifth straight gain.
Analysts attributed Tuesday's advance, which gained momentum in the last hour, to investors anticipating a GOP-controlled Congress as well as another interest rate cut from the Federal Reserve, which meets today.
"If we get a sweep by the Republicans, that raises a lot of hope as far as tax incentives going forward. This market has a sense that the Republicans are going to recapture the Senate," said Peter Cardillo, president and chief strategist of Global Partners Securities.
The Dow ended a lightly traded session up 106.67, or 1.2 percent, at 8,678.27. In the past three sessions, the Dow has climbed 281.24.
The broader market also rallied. The Nasdaq composite index rose 4.63, or 0.3 percent, to 1,401.17, having fallen as much as 17 earlier. The Nasdaq has a five-day gain of 100.63.
The Standard & Poor's 500 index advanced 7.04, or 0.8 percent, to 915.39, for a three-day gain of 29.63.
There was no earnings or economic news to sway trading Tuesday, which is typical for an Election Day. But after four straight weeks of gains from better-than-expected third-quarter earnings and a technology rally on Monday, many investors believe that the bear market is nearly over and that now is a good time to buy stocks again.
"You are hard pressed to sell into these kind of moves," said Bryan Piskorowski, market commentator for Prudential Securities.
The midterm election has contributed to the recent rallies. Investors have been hoping that Republicans would maintain control of the House as well as win the Senate.
Anticipation of Wednesday's Federal Reserve meeting has also provided some lift. The market was expecting that the central bank would cut rates again, probably by 0.25 percentage point, to reinvigorate the economy. The Fed cut rates 11 times last year.
Among blue chips, Boeing rose $1.85 to $31.52, Johnson & Johnson climbed $1.18 to $59.89, and Philip Morris advanced 94 cents to $42.68.
Cisco Systems rose 38 cents to $12.69 ahead of its earnings results due out Wednesday.
But software maker Adobe Systems dropped $1.56 to $25.82 after Deutsche Securities downgraded to "sell" from "hold."
Advancing issues narrowly outnumbered decliners 14 to 13 on the New York Stock Exchange. Consolidated volume was light at 1.67 billion shares, below Monday's 2.07 billion.
The Russell 2000 index, which tracks smaller company stocks, fell 0.90, or 0.2 percent, to 386.07.
Overseas, Japan's Nikkei stock average finished Tuesday up 2.9 percent. In Europe, France's CAC-40 gained 0.9 percent, Britain's FTSE 100 rose 0.1 percent, and Germany's DAX index advanced 0.7 percent.