NEW YORK – U.S. stocks rose Tuesday as industrial and technology companies recovered some of the big losses they took over the past month. Strong company earnings also contributed to the gains, but stocks stayed calm as traders waited for results from the midterm elections in the U.S.
Industrial and basic materials companies made some of the biggest gains following reports from fertilizer maker Mosaic and granite, limestone, sand and gravel seller Martin Marietta Materials. Bond prices dipped, sending yields higher. Oil prices continued to fall, extending four weeks of losses. British stocks fell as negotiators from the U.K. and European Union as remained deadlocked over the issue of Ireland’s borders.
The midterm elections will determine control of the U.S. House and Senate, and 36 governorships are being contested along with other state and local positions. The vote could affect U.S. trade, economic and security policies.
Alicia Levine, chief market strategist at BNY Mellon Investment Management, said some of the most dramatic reactions to the elections might be seen in the health care sector, as Republicans could make another attempt to eliminate the 2010 Affordable Care Act if they keep control of the House and Senate.
“If the Democrats take the House, the Affordable Care Act is not under threat of being repealed,” she said, which could help health insurers and hospitals. “If we see the Democrats take the governors houses, you could also see the expansion of Medicaid.”
A Democratic House majority might work with the administration to try to reduce drug prices, and would take a more lenient approach on food stamp benefits. That could help big box stores and grocery chains, which get a lot of revenue from those programs.
If Republicans keep control of the House, Levine said, they might index capital gains taxes to inflation, which would effectively cut those taxes. While that could boost the economy, it would also encourage the Federal Reserve to keep raising interest rates at a faster pace, and investors are already concerned that rates could rise too fast.
The S&P 500 index rose 17.14 points, or 0.6 percent, to 2,755.45. The Dow Jones Industrial Average gained 173.31 points, or 0.7 percent, to 25,635.01. The Nasdaq composite picked up 47.11 points, or 0.6 percent, to 7,375.96. The Russell 2000 index of smaller-company stocks added 8.59 points, or 0.6 percent, to 1,556.10.
Stocks dropped in October and recovered a sliver of their gains during a three-day rally last week. They made smaller moves over the final few days before the polls closed. Stocks tend to fall before midterm elections and then rally once the voting is over. The S&P 500 has generated an average price return of 16.7 percent in the 12 months after midterm elections since 1946, according to CFRA.
Drugstore and pharmacy benefits manager CVS Health rose 5.7 percent to $77.90 after its results topped Wall Street forecasts in the third quarter. It was helped by a large bump in prescriptions. CVS also said it expects to complete its purchase of health insurer Aetna before the Thanksgiving holiday.
Symantec rallied after the security software maker said it bought two smaller companies. It didn’t disclose terms. Shares of Symantec rose further after Reuters reported that private equity firm Thoma Bravo is interested in buying the company. The stock jumped 12.6 percent to $22.54.
Among materials companies, Mosaic rose 10.6 percent to $35.64 after it raised its annual profit forecast, and Martin Marietta climbed 8.4 percent to $189.55. Construction materials company Vulcan gained 3.5 percent to $104.12.
Industrial companies also rose. Caterpillar climbed 2.3 percent to $129.33 and Boeing added 1.2 percent to $366.47.
Oil prices continued to slip after the U.S. said it would allow a group of allies to continue buying oil from Iran as long as they continued to try to reduce their imports from that nation. The U.S. reinstated sanctions on Iran this month after withdrawing from an international agreement intended to curb Iran’s nuclear program, and analysts feared that oil prices would jump as supplies tightened.
Benchmark U.S. crude oil fell 1.4 percent to $62.21 a barrel in New York. In early October it traded above $76 a barrel. Brent crude dipped 1.4 percent to $72.13 a barrel in London.
Bond prices fell. The yield on the 10-year Treasury note rose to 3.22 percent from 3.19 percent.
Britain’s FTSE 100 shed 0.9 percent as Britain and the EU tried to resolve their differences over the Irish border. The two sides are trying to find a way to make sure there are no customs posts or other checks on the border between EU member Ireland and Northern Ireland, which will leave the group along with the rest of the U.K.
In France, the CAC 40 fell 0.5 percent. Germany’s DAX dipped 0.1 percent.
In other commodities trading, wholesale gasoline was little changed at $1.69 a gallon and heating oil was also little changed at $2.19 a gallon. Natural gas remained at $3.56 per 1,000 cubic feet.
Gold shed 0.5 percent to $1,226.30 an ounce. Silver lost 1 percent to $14.50 an ounce. Copper fell 0.9 percent to $2.73 a pound.
The dollar rose to 113.40 yen from 113.21 yen. The euro slipped to $1.1413 from $1.1418.
Japan’s Nikkei 225 index rose 1.1 percent and the Kospi in South Korea added 0.6 percent. Hong Kong’s Hang Seng bounced gained 0.7 percent.
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