Play Your Local Stocks for a Bush or Kerry Win

Sector: Utilities
Washington angle: Avista (AVE Quote) and Puget Energy (PSD Quote)

Republican members of Congress and a second Bush administration are expected to try to repeal the Public Utility Holding Company Act, which has governed electric companies for 70 years, as part of an energy bill in a second term. Advocates say unleashed utilities would be freer to compete with international utilities, spend less on pesky regulation compliance and improve profitability through opportunistic mergers.

Additionally, a continuation of new, lower taxes on dividends would underpin the appeal of investments in these high-yielding stocks. Spokane-based Avista generates and transmits electricity and transports natural gas; it yields 2.9%. Puget Energy, based in Bellevue, is in the same business and yields 4.5%.

Sector: Multiline insurance
Washington angle: Safeco (SAFC Quote)

ISI analysts say that if tort reform is pursued in a second term, that would help insurers like Seattle-based Safeco that are exposed to a wide variety of individual and business claims.

Sector: Paper
Washington angle: Longview Fibre (LFB Quote), Potlatch (PCH Quote) and Weyerhaeuser (WY Quote)

Most U.S. paper companies used asbestos extensively in their mills and are thus subject to expensive litigation from workers who contracted lung disease. These companies could gain a great deal if Bush wins and the GOP obtains more seats in the Senate, where legislation on reducing asbestos-liability awards has been bottled up for years.