The S&P Healthcare Index <.GSPA> climbed 1.8 percent, led by Humana Inc , which jumped 6.7 percent to $51.75, as voters headed to the polls to determine who will replace Edward Kennedy in a too-close-to-call race.
The bottom line there is it appears to be tilting toward the Republican, so in that case it's going to be tougher to get the bill as it was presented through the Senate passed, said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia, Pennsylvania.
Gridlock is good, and that's what is probably the feeling coming from investors.
The Dow Jones industrial average <.DJI> gained 58.72 points, or 0.55 percent, to 10,668.37. The Standard & Poor's 500 Index <.SPX> rose 8.41 points, or 0.74 percent, to 1,144.44. The Nasdaq Composite Index <.IXIC> climbed 24.70 points, or 1.08 percent, to 2,312.69.
McDonald's Corp added 1.5 percent to $63.24 after Credit Suisse boosted its rating on the fast-food restaurant chain, saying the company's international business would be a driver of earnings estimate increases.
Citigroup Inc added 0.3 percent to $3.43 as it posted a $7.6 billion fourth-quarter loss after taking charges linked to repaying government funds, following in the footsteps of JPMorgan Chase & Co's disappointing results on Friday.
With the JPMorgan number last week there was lowered expectations for the banks, said Stephen Massocca, managing director, Wedbush Morgan in San Francisco. When people saw the retail side of JPMorgan, that's pretty much what you saw with Citibank.
Kraft Foods Inc lost 2.9 percent to $28.71 after the company agreed to a revised cash-and-stock deal to buy Cadbury for about $19.6 billion, creating the world's top confectioner.
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.
Tyco International gained 1 percent to $37.92 after the industrial conglomerate said it will acquire Broadview Security, which operates for Brink's Home Security Holdings Inc , for $1.9 billion in a deal that brings together two large providers of residential and commercial security in North America, the two companies said on Monday.
Brink's shares surged 31.8 percent to $41.41.
Semiconductor stocks helped push the Nasdaq higher, with chipmaker Xilinx Inc up 1.5 percent to $23.87 after RBC Capital raised its rating on the stock to outperform from sector perform.
The PHLX Semiconductor index <.SOXX> advanced 1.3 percent.
Parker Hannifin Corp jumped 6.3 percent to $62.27 after the maker of motion control technology reported a smaller-than-expected drop in quarterly profit and raised its fill year earnings forecast.
(Additional reporting by Leah Schnurr; Editing by Padraic Cassidy)