US stocks climbed on Tuesday on an Election Day that will resolve a key question overhanging the market and investors picked up shares around five-year lows amid further signs of easing in credit markets.
The Dow Jones industrial average rose 267.70 points, or 2.9%, to 9,587.53. The Standard & Poor's 500 Index gained 34.86 points, or 3.6%, at 1,001.16. The Nasdaq Composite Index was up 48.40 points, or 2.8%, at 1,774.73.
Australian shares are pointed higher, with the main futures contract up 134 points to 4345 points. On Tuesday, the closely watched S&P/ASX200 share index rallied late in the day to end almost flat.
The Australian dollar surged overnight, jumping about 2 US cents to 69.48 US cents in recent trading and it was buying 69.25 yen.
Strong results
Strong earnings from MasterCard Inc and Archer Daniels Midland Co improved optimism about consumer spending and pricing power even as data pointed to a worsening slowdown.
MasterCard, the world's second-largest card network, rose more than 16% after the company reported better-than-expected earnings late on Monday. Dow component American Express gained 5%.
Economic bellwether General Electric was the biggest boost on the Dow, rising more than 8% as the Treasury Department was exploring how to expand its capital injection program and was considering specialty finance firms, such as GE's GE Capital unit, according to a source familiar with the government's thinking.
The interest rates banks charge each other for short term loans also fell again, providing further hope that measures to shore up the credit markets are taking hold.
But the presidential election was first and foremost on investors' minds, with market watchers noting there was some relief that the final outcome was within reach.
``We normally would have a relief rally and this happens almost every election,'' said Al Kugel, chief investment strategist at Atlantic Trust in Chicago.
``It isn't going to matter too much what the program of the elected president and Congress will be. Fundamentals will overwhelm the politics.''
GE gains
GE gained 8.1% to $US20.87. A possible next step for Treasury could be extending help to specialty finance firms such as GE Capital, CIT Group and others, the source said.
CIT shot up 35.4% at $US6.12. MasterCard was up 16.6% at $US167.37, while American Express rose 5.4% to $US29.84.
ADM jumped 16.6% to $US24.62 after it posted a sharply higher profit, helped by higher selling prices and an accounting change.
An S&P index of energy companies rose 5.8% as the price of oil jumped more than $US7.43 to $US71.34 a barrel on signs Saudi Arabia had made significant cuts in crude supplies. Exxon Mobil was up 4.7% at $US77.79.
Microsoft
On the Nasdaq, Microsoft was among the biggest boosters, rising 3.6% to $US23.45.
Tenet Healthcare Corp fell nearly 30% to $US2.91 after the hospital operator reported worse-than-expected results and cut its 2008 forecast.
In economic news, data showed that new orders received by US factories took a surprisingly steep tumble for a second month in a row during September, but the markets largely shrugged off the data.
At least 130 million Americans were expected to vote on a successor to President George W. Bush and set the country's course for the next four years to tackle the economic crisis, wars in Iraq and Afghanistan and domestic issues such as health care.
Opinion polls indicate Democrat Barack Obama is running ahead of Republican John McCain in enough states to give him more than the 270 electoral votes he needs to win.
Reuters with BusinessDay
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