Stocks Climb on GOP Wave Election

Markets Reuters

U.S. stocks rose on Wednesday, with the Dow advancing to a record after the Republican Party took control of the Senate in the midterm elections, as expected, and following a stronger-than-anticipated report on the labor market.

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Some weak earnings in the tech sector capped gains in the Nasdaq, but the beaten-down energy sector rallied on hopes a Republican majority could lead to new legislation that impacts the group. That includes approval of oil and gas pipelines and reforms of crude and natural gas export laws.

Energy shares had lagged recently, suffering massive losses as crude oil prices plunged to a three-year low. The S&P energy index was the only one of ten primary S&P 500 sectors to be negative for the year, though it rose 1.6 percent as the strongest group of the day.

Equities rose on relief that election results were clear, with the upcoming Senate majority party not in doubt. Investors had been concerned that some close races would be forced into run-offs, an outcome that could have led to weeks of delay in knowing which party would control Congress's upper chamber.

"It had looked like some of the races would be very close and that we might not know who controlled the Senate, but in the end the results were pretty decisive," said John Carey, portfolio manager at Pioneer Investment Management in Boston. "That's good news for the industries that had been subject to regulatory issues."

U.S. private employers added 230,000 jobs in October, more than expected and the most since June, according to the ADP National Employment report. The data could raise hopes for Friday's closely-watched payroll report.

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Separately, the pace of growth in the U.S. services sector slowed more than expected in October, sliding for a second month to its lowest level since June, according to the Institute for Supply Management's services index.

Time Warner (TWX) rose 2.9 percent to $77.16 after it reported revenue growth of 3 percent. Activision Blizzard (ATVI) late Tuesday raised its full-year forecast, sending shares up 3 percent to $20.55.

Limiting the Nasdaq's advance, TripAdvisor (TRIP) dropped 14 percent to $72.29 and was the S&P's biggest decliner a day after posting weaker-than-expected earnings. FireEye (FEYE) fell 15 percent to $29.08 a day after the cybersecurity company's revenue outlook was largely below expectations.

At 12:07 p.m. (1707 GMT) the Dow Jones industrial average rose 95.27 points, or 0.55 percent, to 17,479.11, the S&P 500 gained 9.86 points, or 0.49 percent, to 2,021.96 and the Nasdaq Composite added 9.28 points, or 0.2 percent, to 4,632.92.

Advancing issues outnumbered declining ones on the NYSE by 1,796 to 1,130, for a 1.59-to-1 ratio on the upside; on the Nasdaq, 1,562 issues rose and 1,033 fell for a 1.51-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 83 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 92 new highs and 38 new lows. 

(Editing by Bernadette Baum)