Stocks Conquer Election Angst

In the Senate, a close race in Montana was determined by midday to have been won by the Democratic challenger, meaning five slots have transferred from the GOP to Democratic hands. A race in Virginia, which remains the deciding factor in the balance of power, is still too close to call.

With earnings winding down and the economic calendar bare, the focus of the trading session was on the election results.

"Investment implications have been bandied about. However, in the long run, the economy wins out, and on that score we continue to look rather slow," said Paul Nolte, director of investments with Hinsdale Associates. "If not for a robust employment report, investors would be fretting about recession."

In addition to the Congressional moves, there also will be a change at the Pentagon. Defense Secretary Donald Rumsfeld will resign from his position, President Bush said. Former CIA chief Robert Gates will take Rumsfeld's place.

By sector, oil stocks were the big winners of the session. The Philadelphia Oil Service Sector Index finished higher by 2.2%, and the Amex Oil Index gained 1.4%. Airline stocks were among the hardest hit, with the Amex Airline Index losing 1.5%.

Before trading got underway, several earnings reports rolled in. Sirius Satellite Radio (SIRI Quote) narrowed its quarterly loss, and Barr Pharmaceuticals (BRL Quote) had strong profits, but sales were a little light. Sirius closed higher by 0.7% to $4.12, while Barr lost 3.6% to $49.79.