Stocks - Dow Rallies as Midterm Mania Grips Wall Street
Investing.com - The Dow closed higher Tuesday, led by materials stocks on the back of strong corporate earnings, though uncertainty about the outcome of the U.S. midterm election results kept some traders on the sidelines.
The Dow Jones Industrial Average rose 0.68%. The S&P 500 rose 0.59%, while the Nasdaq Composite rose 0.64%.
As the U.S. midterm elections got underway Tuesday, investors appeared to keep their powder dry until there was clearer picture of how they would shake out, with consensus indicating a split Congress the likely outcome.
While many fear a split Congress could lead to political gridlock in Washington, stifling President Donald Trump's ability to further implement expansive fiscal policy measures, some on Wall Street reminded investors that markets generally do well under in those times.
"Markets generally do well under gridlock," said Bank of America Merrill Lynch. "A modest infrastructure bill might see bipartisan support, which could lift industrials and materials."
Upbeat earnings from companies in the materials sector, meanwhile, teased some investors into the market, underpinning the broader averages.
Fertilizer company Mosaic (NYSE:MOS) rose 10.6% as earnings missed by penny, but revenue topped expectations. Building materials producer Martin Marietta (N:NYSE:MLM) gained 8.4% following its above-forecast earnings report.
Health care stocks were also in focus following strong results from Mylan (NASDAQ:MYL), CVS Health (NYSE:CVS) and Eli Lilly (NYSE:LLY).
Both Mylan and CVS Health posted earnings that beat estimates, sending their shares higher. But Eli Lilly stumbled after its above-forecast earnings and revenue were overshadowed by mixed results from key products.
Goldman Sachs has tipped the health care sector to rally should the midterm elections lead to a divided Congress, as the chances of major regulatory changes proposed by Trump would likely be mitigated.
Energy names struggled to participate in the broader market rally as U.S. oil prices slumped after the United States granted waivers to some of Iran's biggest customers, allowing them to continue buying oil from the Islamic Republic.
On the economic front, job openings eased in September, but remained near record highs.
The U.S. Labor Department's latest Job Openings and Labor Turnover Survey (JOLTs) report, a measure of labor demand, showed job openings in September fell to about 7.009 million from the prior month, missing expectations for 7.100 million.
On the corporate news front, Symantec (NASDAQ:SYMC) surged 12.6% after private equity firm Thomas Bravo reportedly approached the company with a possible buyout offer, according to Reuters.
But confidential sources had indicated to Reuters that there was no certainty that discussions between company and the private equity firm will lead to a deal.
Top S&P 500 Gainers and Losers Today:
Mylan (NASDAQ:MYL), Symantec (NASDAQ:SYMC) and Mosaic (NYSE:MOS) were among the top S&P 500 gainers for the session.
Nektar Therapeutics (NASDAQ:NKTR), Broadridge Financial Solutions (NYSE:BR) and Ralph Lauren (NYSE:RL) were among the worst S&P 500 performers of the session.
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