NEW YORK – Stocks climbed on Tuesday on speculation the presidential election will produce a clear winner, removing a major source of uncertainty that has dogged investors.
Investors awaited results of a close race that will set the country's course for the next four years on spending, taxes, healthcare and other policies.
"I think it's relief that hopefully the election will be over," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.
"Clients at this point have built cash ahead of the elections, and it looks like the market is anticipating a post-elections surge knowing the election is finally over."
Polls showed President Barack Obama and Republican challenger Mitt Romney in a tight race, with a few battleground states expected to decide the winner. The outcome will affect industry sectors from energy to financials.
The Dow Jones industrial average was up 144.06 points, or 1.10 percent, at 13,256.50. The Standard & Poor's 500 Index was up 12.05 points, or 0.85 percent, at 1,429.31. The Nasdaq Composite Index was up 15.97 points, or 0.53 percent, at 3,015.63.
Stocks began adding to gains around 11:30 a.m. in New York, shortly after the close of European markets. E-mini futures contracts, a contract based on the S&P 500 index, also jumped at that time.
"Around 11:40 a.m., a huge order of contracts in e-mini futures went through, which looks like one big order. That caused a spike in our market," said James Dailey, portfolio manager at TEAM Asset Strategy fund in Harrisburg, Pennsylvania.
Gold and oil futures also gained. Among S&P 500 sectors energy led gains along with materials and industrial shares. The S&P 500 energy index was up 1.5 percent. Defense shares were also gaining, with shares of Raytheon up 2.4 percent at $57.79.
Investors will also closely watch races in the Senate and House of Representatives that could affect the "fiscal cliff," or $600 billion in spending cuts and tax increases that are set to be automatically triggered at the end of the year.
The U.S. fiscal standoff threatens to bring on another recession unless a deal is reached between Congress and the White House.
"There's been a lot of talk that once the election is decided, no matter how it went, just to the have the uncertainty over would be good for the market. A number of people have bought into that and are trying to buy into tonight's news," said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
The gains came despite more disappointing results from U.S. companies, with S&P 500 earnings estimated down 0.6 percent for the third quarter from a year ago, Thomson Reuters data showed.
Express Scripts Holding Co plunged 12.4 percent to $55.07 and was the biggest drag on the Nasdaq after the pharmacy benefits manager said analysts' forecasts for its 2013 results were too aggressive.
(Additional reporting by Angela Moon and Herbert Lash; Editing by Kenneth Barry)