US: Dow ends up 2.1% to conclude strong Election Day session

[NEW YORK] Wall Street stocks enjoyed a buoyant Election Day session on Tuesday, finishing solidly higher amid hopes of a straightforward outcome to a contentious presidential campaign.

The Dow Jones Industrial Average rose 2.1 per cent, or about 550 points, to finish at 27,480.03, adding to the gains from a positive session Monday that won back a fraction of last week's losses.

The broad-based S&P 500 advanced 1.8 per cent to end at 3,369.16, while the tech-rich Nasdaq Composite Index gained 1.9 per cent to 11,160.57.

In the battle for the White house, polls give the edge to former vice-president Joe Biden over President Donald Trump, but political analysts say a Trump victory remains a distinct possibility.

Analysts said Tuesday's rally reflected less of a bet on one candidate or the other, and more a hope that the United States can avoid a protracted fight and move past one of the key uncertainties in markets.

The rally is "predicated somewhat on the hope that we're about to get closure on the election," said Briefing.com analyst Patrick O'Hare.

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Mr O'Hare said investors are not necessarily expecting the election to be called on Tuesday, or even Wednesday, but markets would worry if the situation turns into a lengthy legal fight.

"The market can handle the idea of a delayed result better than the idea of a contested result," he said.

Analysts also expect Washington to produce a stimulus package after the election, regardless of who wins.

But stimulus could be clouded further if there is a bitter legal brawl over the White House, which also could increase the odds of civil unrest.

A closely-watched Wall Street volatility index, seen as a proxy for risk, dipped somewhat on Tuesday but remains at an elevated level.

AFP