MARKET SNAPSHOT: U.S. Stocks Gain As Americans Vote

Date : 11/02/2010 @ 12:08PM
Source : Dow Jones News
Stock : Rackspace Hosting, (delisted) (RAX)
Quote : 31.99  0.0 (0.00%) @ 2:05AM

MARKET SNAPSHOT: U.S. Stocks Gain As Americans Vote

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By Kate Gibson

U.S. stocks rose to six-month highs Tuesday as Americans voted in midterm elections, Oracle Corp. bought another technology company and investors anticipated further stimulus from the Federal Reserve.

"We should have a clearer picture tomorrow morning of the political leadership of the House and the Senate, thus allowing those bodies to consider tax reform and a couple of other important issues during its lame- duck session and ahead of year-end," wrote Fred Dickson, chief investment strategist at Davidson Cos.

The Dow Jones Industrial Average (DJI) gained 61.53 points, or 0.6%, to 11,186.15, with 24 of its 30 components rising. Gains were led by home-improvement retailer Home Depot Inc. (HD), whose shares rose 2.2%.

The S&P 500 Index (SPX) climbed 6.73 points, or 0.6%, to 1,191.11.

The Nasdaq Composite (RIXF) rose 16.86 points, or 0.7%, to 2,521.71.

Stocks have largely tread water in recent days amid uncertainty over the outcome of midterm elections and over the scope of a second round of quantitative easing expected to be announced Wednesday by the Fed.

Most analysts expect the GOP to take control of the U.S. House of Representatives and Democrats to retain control of the Senate, although without the super majority needed to bypass filibusters.

"It's hard to know what could upset the apple cart this week, the Senate being close is one thing and the other is the magnitude of quantitative easing," said Art Hogan, chief market strategist at Jefferies & Co.

Tuesday also brought revived M&A activity in the technology sector, with Oracle Corp. (ORCL) saying it would pay $1 billion to acquire Art Technology Group Inc. (ARTG) , which makes software used in online retail transactions.

The ongoing M&A trend among tech companies makes sense, given "as a sector, tech has more cash on the balance sheet than any other," said Hogan.

In a similar vein, Michael Dell, the chief executive officer at Dell Inc. (DELL) , said the computer maker would be announcing an acquisition in the cloud-computing markets.

Dell's comments, made in Hong Kong, prompted speculation that helped boost shares of Rackspace Hosting Inc. (RAX) up 9.4%.

For every stock falling nearly three gained on the New York Stock Exchange, where 307 million shares traded as of 11:30 a.m. Eastern.

 
 

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