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 6.4 percent to $51.61, 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 3.3 percent at $40.77, and Pfizer Inc

up 2.1 percent at $19.88. The pair represented the Dow's top two percentage gainers.

The market will look at very favorably because it appears we'll get some breaks on the more 'progressive' ideas that get floated around, said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

Breaks like that would be very helpful to the market going forward.

The Dow Jones industrial average <.DJI> gained 70.51 points, or 0.67 percent, to 10,680.16. The Standard & Poor's 500 Index <.SPX> rose 8.36 points, or 0.74 percent, to 1,144.39. The Nasdaq Composite Index <.IXIC> climbed 22.80 points, or 1.00 percent, to 2,310.79.

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

McDonald's stock gained 1.9 percent to $63.49 and was the Dow's top percentage gainer not related to healthcare.

Citigroup Inc was up 0.6 percent at $3.44 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 2.7 percent to $28.79 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 for Brink's Home Security Holdings Inc , for $1.9 billion. Brink's shares surged almost 32 percent to $41.39.

Semiconductor stocks helped push the Nasdaq higher, with chipmaker Xilinx Inc up 0.9 percent at $23.72 after RBC Capital raised its rating on the stock to outperform from sector perform.

The PHLX Semiconductor index <.SOXX> advanced 1.2 percent.

Parker Hannifin Corp

jumped 4.3 percent to $61.08 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 stock was up 0.9 percent at $132.97 on the New York Stock Exchange, while Google was up 1.5 percent at $588.69 on the Nasdaq. Goldman Sachs' shares advanced 0.5 percent to $166.06 and American Express' stock rose 1.3 percent to $42.91, both in NYSE trading.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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