Published November 06, 2012
NEW YORK – Stocks advanced at the open on Tuesday, putting the S&P 500 on track for a second straight advance, as Americans streamed to the polls to elect the country's president.
Polls showed President Barack Obama and Republican challenger Mitt Romney neck-and-neck in a race that will be decided in a handful of battleground states. A change in political leadership could affect sectors such as healthcare, energy and financials.
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.
"We do know this much, though, the resident in the White House may change, the face of Washington is still going to be one of tremendous gridlock, discord, and dysfunction and markets are going to force Washington to come to terms with the dysfunction," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
"One way or the other, markets are going to dictate that the fiscal cliff gets addressed."
Trading volume is expected to light while investors remain uncertain about the emerging political picture.
The Dow Jones industrial average gained 68.73 points, or 0.52 percent, to 13,181.17. The Standard & Poor's 500 Index rose 4.43 points, or 0.31 percent, to 1,421.69. The Nasdaq Composite Index dropped 0.30 points, or 0.01 percent, to 2,999.36.
Fossil Inc slumped 11 percent to $83.77 after the fashion accessories maker posted lower-than-expected quarterly revenue due to a fall in sales in Europe and a stronger dollar.
Express Scripts Holding Co plunged 15.8 percent to $52.92 and was the biggest drag on the Nasdaq after the pharmacy benefits manager said analysts' forecasts for its 2013 results were too aggressive, casting doubt on how well it is integrating its $29 billion purchase of Medco Health Solutions Inc.
Emerson Electric Co climbed 2.8 percent to $51.91 after the industrial conglomerate posted adjusted earnings that topped Wall Street expectations and said it will pursue a sale of its $1.4 billion embedded computing and power business.
Zillow Inc tumbled 19.2 percent to $27.28 after the real estate website forecast fourth-quarter revenue below analysts' estimates. The company lost one of its larger advertisers, Foreclosure.com.
According to Thomson Reuters data through Monday morning, of the 387 companies in the S&P 500 that have posted earnings, 61.8 percent have topped Wall Street expectations, roughly in-line with the 62 percent quarterly average since 1994 and below the 67 percent average over the past four quarters.
But corporate revenue has disappointed investors, with only 38.1 percent of companies besting analyst expectations, well below the 62 percent quarterly average since 2002 and the 55 percent average over the past four quarters.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)