Wall Street gains as investors look to US elections

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Wall Street’s major indexes closed higher on Tuesday as voters headed to the polls in US midterm congressional elections and investors hoped the result would provide some relief for stocks after prolonged uncertainty.

"People are anticipating the results of the election and there's a high possibility of gridlock ... There could be another leg higher if we get gridlock because the existing economic agenda won't be altered materially," said Mona Mahajan, US Investment Strategist, Allianz Global Investors, New York.

"There's still in people's minds the idea that there could be a surprise. Most people are waiting to see what the results are before they make any major investment decisions."

The Dow Jones Industrial Average rose 173.31 points, or 0.68 percent, to 25,635.01, the S&P 500 gained 17.14 points, or 0.63 percent, to 2,755.45 and the Nasdaq Composite added 47.11 points, or 0.64 percent, to 7,375.96.

About 6.85 billion shares changed hands on US exchanges compared with the 8.7 billion average for the full session over the last 20 trading days.

Some investors said they would expect a sharp selloff, at least in the near term, if the Democrats gain control of both the House and the Senate. In contrast, stocks may rally on hopes of more tax cuts if Republicans retain control of the House. Others hoped that the elimination of election uncertainty would create a boost either way.

"What I've noticed over the last couple of weeks is people (are) back in the market. Once we get through the midterms, stocks usually go up, whatever the result, and you have to be a buyer," said Jason Ware, chief investment officer at Albion Financial in Utah.

All of the S&P's 11 major sectors showed gains, led by a 1.5-percent-rise in the materials index, which was helped by earnings reports.

Healthcare stocks under the spotlight

Healthcare stocks got a boost from Mylan, which jumped 16 percent after the generic drugmaker reported a bigger-than-expected third-quarter profit as it sold more products in emerging markets.

CVS Health Corp. signage /VCG Photo

Pharmacy chain CVS Health Corp. rose 5.7 percent after its results.

The health sector could be under the spotlight after the election as Trump's efforts to lower prescription drug prices could get more attention should Democrats gain control in Congress.

Advancing issues outnumbered declining ones on the NYSE by a 1.66-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favored advancers.

The S&P 500 posted 19 new 52-week highs and one new low; the Nasdaq Composite recorded 43 new highs and 68 new lows.

Source(s): Reuters