- 02Nov
(Reuters) - Wall Street rose firmly at the open on Tuesday as investors anticipated huge gains by Republicans in the midterm elections, an outcome that is likely to boost stocks and further fuel risk appetite.
Voters could sweep Democrats from power in Congress, halting President Barack Obama's legislative agenda. Polls indicated Republicans will gain control of the U.S. House of Representatives, while Democrats retain control of the Senate.
The Fed is expected to announce a program of large-scale asset purchases on Wednesday, following a two-day meeting. Expectations the Fed will inject at least $500 billion into the economy are already built into stocks. For a PDF special report, see link.reuters.com/pyb23q
"I think it is people trying to get in front of what they think will be (Republican gains). The talk about quantitative easing beginning this week has also been seen as a strong point for the market," said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
The Dow Jones industrial average .DJI was up 78.10 points, or 0.70 percent, at 11,202.72. The Standard & Poor's 500 Index .SPX added 8.66 points, or 0.73 percent, at 1,193.04. The Nasdaq Composite Index .IXICjumped 22.21 points, or 0.89 percent, at 2,527.05.
The U.S. benchmark S&P 500 has advanced about 13 percent since the start of September on hopes of Republican gains and further Fed action.
The dollar fell 0.8 percent against a basket of currencies .DXY. The U.S. dollar and stocks have established a close inverse correlation in recent weeks.
Further weakening the greenback, Australia's central bank surprised markets by raising its key cash rate to a two-year high of 4.75 percent on Tuesday, saying a modest hike was a prudent move against inflation.
On the earnings front, Pfizer Inc (PFE.N) reported sales far below estimates, and the stock fell 0.6 percent at $17.51.
MasterCard Inc (MA.N) jumped 3 percent to $246.11 after the world's No. 2 credit and debit processing network said profit rose 15 percent.
Kellogg Co (K.N) dropped 1.7 percent to $49.90 after the cereal maker posted lower earnings.
U.S.-traded shares of BP Plc (BP.N)(BP.L) were up 1.8 percent to $41.48 after the British oil major said underlying profit beat expectations, even as it raised its estimate on the likely cost of its Gulf of Mexico oil spill to $40 billion.
The CBOE Volatility index VIX .VIX, Wall Street's so-called fear gauge, was down 1.2 percent after six days of gains, but analysts expect to see swings later in the day when rumors of exit poll results start to hit the market.
