Bulls Win the Race

For buyers, it's business as usual, and stocks close higher again.
Author:
Publish date:

Updated from 4:17 p.m. EST

Stocks closed higher again Tuesday as the midterm elections and the possibility of a power change in Congress didn't deter buyers.

The

Dow Jones Industrial Average

was up 51.22 points, or 0.42%, to 12,156.77, taking its two-day gain to 170 points following six straight declines. Nineteen of the Dow's 30 components were in positive territory, led by a rise of 5.4% in

Boeing

(BA) - Get Report

.

The

S&P 500

was higher by 3.06 points, or 0.22%, to 1382.84, and the

Nasdaq Composite

added 9.93 points, or 0.42%, to 2375.88, boosted by gains of at least 4.8% in

Altera

(ALTR) - Get Report

and

Broadcom

(BRCM)

.

"The market's rise isn't reflective of the election," said Barry Hyman, equity market strategist with EKN Financial. "The money just continues to pour into the equity market. There is a presumption that the earnings base of the market is still intact. I'm seeing some performance-chasing here, as well. It's good to see the six consecutive down days on the Dow didn't do any real damage."

About 2.73 billion shares changed hands on the

New York Stock Exchange

, and volume on the Nasdaq was roughly 2.14 billion shares. Winners narrowly outpaced losers.

By sector, semiconductor stocks were the big winners of the session. The Philadelphia Semiconductor Sector index rose 1.9%. Housing stocks were among the hardest hit, with the Philadelphia Housing Sector index losing 0.7%.

With earnings winding down and the economic calendar bare, the focus of the new session was on the polls. Voters will be casting ballots on all 435 members of the House of Representatives, one-third of the Senate and numerous governors and local officials.

To view the latest market video, click here

Political pundits have for some time been predicting the Democrats would reclaim the House from Republican control for the first time since 1994 amid voter anger over the war in Iraq. However, in recent days, the GOP has been performing better in polls ahead of the election. The Senate is generally expected to remain in Republican hands.

On the corporate side, luxury-home builder

Toll Brothers

(TOL) - Get Report

cut its 2007 forecast again, saying it now expects to deliver 6,300 to 7,300 houses next year. The company said fourth-quarter revenue dropped 10% from last year to $1.81 billion and was just short of the consensus estimate. Toll Brothers ended the session down by a penny at $28.04.

At

Beazer Homes

(BZH) - Get Report

, fourth-quarter earnings were better than expected but the company cautioned that housing market fundamentals remain difficult. For the most recent quarter, Beazer earned $92 million, or $2.19 a share, down from $164 million, or $3.61 a share, a year ago. Revenue rose to $1.88 billion from $1.81 billion a year earlier. Beazer tacked on 13 cents, or 0.3%, to $42.07.

Nortel

(NT)

posted a third-quarter loss of $99 million, or 2 cents a share, falling short of estimates. Nortel's board also approved a reverse 1-for-10 stock split of its common shares, effective Dec. 1. Nortel fell by 26 cents, or 10.9%, to $2.13.

Sara Lee

(SLE)

posted fiscal first-quarter earnings of $333 million, or 44 cents a share, up from $67 million, or 9 cents, a year ago. Earnings from continuing operations came to 34 cents a share, ahead of the Thomson First Call consensus of 25 cents a share. Shares gained 5 cents, or 0.3%, to $16.29.

Following the previous close, tax preparer

H&R Block

(HRB) - Get Report

reduced its full-year profit forecast and said it hired Goldman Sachs to find a buyer for its Option One Mortgage unit. Block said Option One will close 12 branch offices in the next four months.

The company said it expects to make between $1.20 and $1.45 a share for the year ending April 30, down from the previous guidance for $1.60 to $1.85. H&R Block rose $1.39, or 6.4%, to $23.28.

Among analyst moves, Banc of America Securities downgraded

Microsoft

(MSFT) - Get Report

to neutral from buy, citing the belief that earnings won't begin outperforming expectations until 2008, rather than 2007. Still, Microsoft finished higher by 11 cents, or 0.4%, to $28.95.

Elsewhere, the benchmark 10-year note was up 10/32 in price to yield 4.66%. The dollar was slumping against the world's other major currencies. Gold futures finished lower by 20 cents at $627.70, and crude oil futures dropped $1.09 to close at $58.93 a barrel.

Overseas, Europe's equities moved higher. London's FTSE 100 was up 0.3% to 6244, and Frankfurt's Xetra DAX was rising by 0.5% to 6362. Asia's shares also showed strength, after the Nikkei finished up 0.2% at 16,393.