US stocks rallied on Tuesday, pushing the Dow Jones industrial average to a fresh all-time high as investors bet midterm elections would leave Congress gridlocked, maintaining the status quo for doing business.
Falling oil prices also helped lift the indexes while surging Boeing Co shares were far and away the top driver of the Dow as it touched a fresh intraday high of 12,196.32. Boeing rose after a unit of package shipper FedEx Corp said it had agreed to buy 15 Boeing 777 freighter aircraft.
The Nasdaq rose during the session to its highest in just over 5-1/2 years, lifted by positive broker comments on design software maker Adobe Systems Inc and network equipment maker Cisco Systems Inc If the election results in political gridlock, as many on Wall Street anticipate, analysts say that could be a near-term positive for stocks as there would likely be fewer government policy initiatives.
"The polls have shown it is pretty likely the Democrats will take over at least the House and the market seems to like that," said David Straus, a portfolio manager with Johnston Lemon Inc in Washington. "The gridlock theory says that not much will change and that tax law is pretty well set. The cuts Bush made will be around until 2010 and anything drastic will be vetoed."
US crude oil prices ended down nearly 2 percent at $58.93 a barrel, with traders awaiting inventory data to be released on Wednesday and actual evidence that Opec's production cut is being implemented. The Dow Jones industrial average was up 51.22 points, or 0.42 percent, to end at 12,156.77. The Standard & Poor's 500 Index was up 3.06 points, or 0.22 percent, to finish at 1,382.84. The Nasdaq Composite Index was up 9.93 points, or 0.42 percent, to close at 2,375.88.
As the day progressed, stocks came off their highs after the Dow hit an all-time high of 12,196.32 and the Nasdaq rose as high as 2,391.34, its highest since February 2001. Opinion polls show Democrats could recapture control of the US House of Representatives from Republicans for the first time in more than a decade, with Senate control hinging on several races that are too close to call.
Polls will begin closing at 6 pm (2300 GMT), but it could be hours before results are known in many crucial races. Cisco rose 0.7 percent, or 16 cents, to $24.84 on Nasdaq after hitting its highest level in nearly two years, on news that UBS raised its price target on the stock and before what is expected to be a strong earnings report on Wednesday. Cisco shares were among the biggest positive influences on the S&P 500 index and the Nasdaq.
Boeing Co was a strong influence, jumping 5.4 percent, or $4.37, to $84.85 on the New York Stock Exchange after the plane deal was announced. The Financial Times also reported that Boeing will boost production rates for its new 787 long-range aircraft in response to higher-than-expected demand.
Shares of design software maker Adobe rose 2.8 percent, or $1.07, to $39.61 on Nasdaq after Citigroup raised its price target on the stock. Trading was active on the NYSE, with about 1.61 billion shares changing hands, equal to last year's daily average of 1.61 billion, while on Nasdaq, about 2.15 billion shares traded, above last year's daily average of 1.80 billion. Advancing stocks outnumbered declining ones by a ratio of 4 to 3 on the NYSE and on Nasdaq, by about 8 to 7.
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