U.S. stocks rose on Tuesday as investors bet that a Senate race in Massachusetts could put President Obama's reform plans, especially those on healthcare, in jeopardy.

The S&P Healthcare Index <.GSPA> climbed 2.1 percent, led by Humana Inc , which jumped 5.5 percent to $51.17, as voters headed to the polls to determine who will replace Edward Kennedy in a close race.

Pharmaceutical companies' shares also advanced, with Merck & Co up 3 percent at $40.64, and Pfizer Inc

up 2.2 percent at $19.91. The pair represented the Dow's top two percentage gainers.

A Republican win would be a positive for the markets since it would mean increased potential for gridlock in Washington, said Carmine Grigoli, chief U.S. strategist at Mizuho Securities USA in New York.

This is probably especially true now, given the very large social agenda of the Obama administration.

The Dow Jones industrial average <.DJI> gained 100.06 points, or 0.94 percent, to 10,709.71. The Standard & Poor's 500 Index <.SPX> rose 12.64 points, or 1.11 percent, to 1,148.67. The Nasdaq Composite Index <.IXIC> climbed 29.11 points, or 1.27 percent, to 2,317.10.

The Dow also received boost from McDonald's Corp after Credit Suisse upgraded the fast food giant to outperform, saying its international businesses were a potential driver of earnings estimates.

McDonald's stock gained 2.1 percent to $63.58 and was the Dow's top percentage gainer not related to healthcare.

Citigroup Inc was up 3.5 percent at $3.54 after it reported a fourth-quarter loss that narrowed from the previous year. The loss came on charges linked to repaying government funds, following in the footsteps of JPMorgan Chase & Co's disappointing results on Friday.

Kraft Foods Inc was the biggest drag on the Dow, falling 1.9 percent to $29.04 after it agreed to a revised cash-and-stock deal to buy Cadbury for about $19.6 billion.

In other acquisition news, Tyco International agreed to buy Broadview Security, which operates as Brink's Home Security Holdings Inc , for $1.9 billion. Brink's shares surged almost 32 percent to $41.34.

Semiconductor stocks helped push the Nasdaq higher, with chipmaker Xilinx Inc up 1.1 percent at $23.78 after RBC Capital raised its rating on the stock to outperform from sector perform.

The PHLX Semiconductor Index <.SOXX> advanced 1 percent.

Parker Hannifin Corp

jumped 4.9 percent to $61.45 after the maker of motion control technology reported a smaller-than-expected drop in quarterly profit and raised its full-year earnings forecast.

The pace of corporate earnings builds later in the week, with IBM Corp scheduled to report after the close on Tuesday and Google Inc , Goldman Sachs Group Inc and American Express Co results due in the following days.

IBM's shares rose 1 percent at $133.11 while Google added 1.2 percent to $587.01, Goldman was up 0.9 percent at $166.74 and AmEx was up 1.3 percent at $42.92.

(Reporting by Ryan Vlastelica; Additional reporting by Rodrigo Campos; Editing by Jan Paschal)

Merck & Co. Investment Goldman sachs Healthcare