Stocks rose broadly on Tuesday as investors scooped up healthcare shares on bets that a potential Republican victory in Massachusetts' Senate race could stall U.S. President Barack Obama's reforms and remove a threat to profits in the sector.
The S&P Healthcare Index <.GSPA> climbed nearly 2 percent, including drug company Eli Lilly
Massachusetts voters were deciding a tight race on Tuesday to replace the late Edward Kennedy, a Democrat. The loss of one seat in the Senate could hurt the Democrats' ability to proceed to a vote on the planned healthcare overhaul that seemed to be in the final stages of the legislative process.
The action in Massachusetts is a revolt on tax and spend, said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston said. It's a potential for gridlock much like we had in the Clinton years. I think there's certainly a desire to return to a more balanced political landscape.
The Dow Jones industrial average <.DJI> shot up 106.71 points, or 1.01 percent, at 10,716.36. The Standard & Poor's 500 Index <.SPX> gained 12.16 points, or 1.07 percent, at 1,148.19. The Nasdaq Composite Index <.IXIC> rose 29.80 points, or 1.30 percent, at 2,317.79.
Health insurers Humana Inc
All 10 S&P 500 industry sectors traded in positive territory, and strong momentum could carry the Dow and the S&P 500 to fresh 15-month closing highs.
The Dow also received a boost from McDonald's Corp
McDonald's stock gained 2.3 percent to $63.74 and was the Dow's second top percentage gainer behind 3M Co
Kraft Foods Inc
In other acquisition news, Tyco International
Shares of large-cap technology companies, including Apple Inc
Apple was up 4.2 percent at $214.51 on Nasdaq, while IBM climbed 1.02 percent to $133.12 on the New York Stock Exchange.
The PHLX Semiconductor Index <.SOXX> advanced 1.7 percent.
Parker Hannifin Corp
(Editing by Kenneth Barry)