* Expectations of a clear winner by Wednesday boost stocks
* Average S&P move on presidential election day: 0.85 pct
* Energy, materials sectors lead gains
* Dow up 1.02 pct, S&P up 0.79 pct, Nasdaq up 0.41 pct
By Atossa Araxia Abrahamian
NEW YORK, Nov 6 U.S. stocks climbed on Tuesday,
the last day of trading before the U.S. election results came to
a close, as investors looked forward to a resolution to the
drawn-out race for the White House.
The rally defied a string of weaker-than expected results
from U.S. companies and was attributed in part to expectations
that a victor in the presidential race would be known late
Tuesday or early Wednesday, despite some fears that have nagged
markets recently that the outcome could remain up in the air for
"The market just wants to wake up tomorrow and know for sure
that there's a winner," said Linda Duessel, senior equity
strategist at Federated Investors.
In trading on the last seven presidential election days,
going back to 1984, the S&P 500 has averaged a gain of 0.85
percent, according to Bespoke Investment Group of Harrison, New
York. Tuesday's gain of 0.79 falls pretty squarely in the realm
of expected performance for the market.
Democratic President Barack Obama is favored by a small
margin in national polls against Republican challenger Mitt
Romney. There was notable strength on Tuesday in stocks and
sectors that are seen as favorable if Romney wins, including
coal, energy and defense shares.
But with volume again below average, moves in those sectors
could have been inflated. The S&P energy sector was up
1.56 percent. Planemaker Boeing jumped 2.3 percent to
$72.02, in part on speculation that Romney could come out on
Heavy betting was seen in the options market on stocks that
could have benefit specifically from either an Obama or a Romney
win, such as health care and energy shares.
Several stocks were expected to show large moves in coming
days, according to JP Morgan derivatives strategist Marko
Kolanovic. Those include health insurers Aetna and
United Healthcare, which would be expected to do well
under Obama, and Arch Coal, one of the coal shares that
could benefit under a Romney administration. United rose 2
percent and Arch Coal gained 3.8 percent.
"People are betting on the results. It's basically
speculation with no volume," said Joe Gordon, managing partner
of Gordon Asset Management in Durham, North Carolina.
"There's still a chance that we'll have a 2000-style
scenario and won't know the election outcome for a month, or way
past tomorrow at least," Gordon said. "And I think that's priced
into the market."
In 2000, Republican George W. Bush won in his race against
Democratic Vice President Al Gore after recounts and a legal
battle over contested votes.
The results of this year's presidential and congressional
elections will play a crucial role in how disagreements over
spending, taxes, healthcare and other policies are dealt with
The U.S. fiscal cliff, the $600 billion in spending cuts and
tax increases that are set to expire at end of the year, has
been weighing on the market for months. It threatens to bring on
another recession unless the budget is successfully
"The market knows that no matter who wins, the fiscal cliff
is here and won't go away regardless of who's elected," said
The Dow Jones industrial average was up 133.08
points, or 1.02 percent, at 13,245.52. The Standard & Poor's 500
Index was up 11.09 points, or 0.79 percent, at 1,428.35.
The Nasdaq Composite Index was up 12.27 points, or 0.41
percent, at 3,011.93.
Computer Sciences Corp jumped 17 percent to $36.80
after the U.S. technology services provider posted a
second-quarter profit that blew past estimates as the company
Shares of AOL Inc jumped 22 percent to $43.70 after
it reported higher-than-expected revenue and profit on the
strongest advertising growth the Internet company has seen in
S&P 500 earnings were estimated down 0.6 percent for the
third quarter from a year ago, according to Thomson Reuters