U.S. stocks traded higher Tuesday, with the Dow industrials rising more than 100 points, boosted in part by the outcome of the presidential debate between Democratic candidate Hillary Clinton and Republican contender Donald Trump and a number of stronger-than-expected economic reports.
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The advance in stocks suggest that U.S. equity markets are betting that Clinton benefited the most from Monday's presidential debate. Stocks are rising at the prospect of a Clinton presidency because the Democrat is viewed as a known quantity while some view Trump as being more unpredictable--a bad thing for stock investors.
"Investors have a better idea about policies of Hillary Clinton, so any sign she is closer to the presidency is a boost for markets," said Diane Jaffee, senior portfolio manager at TCW.
The Dow Jones Industrial Average gained 128 points, or 0.7%, to 18,223, led by gains in shares of International Business Machines Corp.(IBM) and Microsoft Corp.(MSFT) with 28 out of 30 of the blue-chip companies trading higher.
The S&P 500 index rose 13 points, or 0.6%, to 2,159. Tech and telecom shares led the gainers, while the energy was down 0.6% thanks to a slide in oil.
Oil futures tumbled more than 3% after both Iran and Saudi Arabia played down expectations for a deal to freeze or cut oil production at the closely watched informal OPEC meeting on Wednesday.
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Analysts noted that worries over Deutsche Bank and other European banks also continue to rattle investor nerves.
"Some investors are wondering if Deutsche Bank troubles may turn into a Lehman scenario and that's putting pressure on European equities," Mark Kepner, managing director of sales and trading at Themis Trading, referring to Lehman Brothers, which went bankrupt Sept. 15, 2008 and signaled the height of the financial crisis.
The Nasdaq Composite Index was up 40 points, or 0.8%, to 5,298.
However, the main focus early for investors was Monday night's presidential debate and how it could influence the direction of the economy and the global market.
"The perception on Wall Street is that [Clinton] would be the safer pair of hands, but with two further debates and six more weeks of campaigning to go, this race seems set to be a bountiful source of market volatility in the near term," Paul Webb, deputy CEO at ADS Securities London, in a note.
Mexico wave: In another sign suggesting financial markets were betting that Clinton would benefit from the debate, the Mexican peso surged against the dollar on Tuesday. The greenback fell to 19.482 pesos, down from 19.879 pesos late Monday in New York.
The peso has been acting as a gauge of the presidential election sentiment on the theory that a victory for Trump will at the very least result in less trade between the two countries, if not the building of a barrier on the U.S. southern border.
The U.S. Dollar Index , a measure of the buck's strength against a basket of six key rivals, was up 0.1% at 95.49.
Economic docket: The Case-Shiller home price index rose 5.0% for the year in July, while house prices rose 0.6%.
The Markit flash services purchasing managers index for September rose to 51.9 in September from 51 in August.
U.S. consumer confidence rose to 104.1 in September, the highest level since August 2007.
Stocks to watch: U.S.-listed shares of Deutsche Bank AG(DBK.XE) were flat after the U.S. Justice Department's third highest-ranking official said banks can lower penalties by cooperating with authorities, according to a news report.
Shares of EndoChoice Holdings Inc. soared 89% to $7.98 after Boston Scientific Corp. said it would buy the medical technology company for roughly $210 million.
FactSet Inc. plunged 5.9%, even after posting a rise in earnings and revenue in its fiscal fourth quarter.
Kite Pharma Inc. surged 8.7% after the drugmaker late Monday released encouraging test results for its for its non-Hodgkin lymphoma drug.
Nike Inc. will report earnings after the market's close. Shares were up 0.4%.
Other markets: Stocks in Europe eked out last minute gains as oil's slide dragged on the energy sector. In Asia, shares reversed earlier declines as investors reacted to the U.S. presidential debate, with the Nikkei Stock Average closing up 0.8%.
Gold futures fell 1% to $1,330.20 an ounce.