Updated from 1:15 p.m. EDT

The Republican sweep of Congress has Wall Street licking its chops over expected pro-business initiatives, with several key sectors likely to benefit.

"There is a significant view Republican control means various issues might be addressed, including tort reform and less onerous healthcare policy, as well as making last year's tax cuts permanent, not to mention possibly more fiscal stimulus," said Tobias Levkovich, a strategist at Salomon Smith Barney.

Here's how five sectors -- energy, drugs, defense, tobacco and industrials -- stand to benefit.

Energy:

The oil and gas industry pumped up Republican campaigns considerably in the midterm election, donating $14 million, in hopes that a GOP Congress may be able to pass Bush's energy bill, according to the Center for Responsive Politics, a nonprofit organization.

Thus far, legislators have been stuck on the issue of gasoline additives and power-market regulation. Also, Democrats have opposed Bush's plan to open a wildlife refuge in Alaska for oil drilling. A Republican Congress renews hope that the House and Senate may be able to come together on some of these points.

In recent trading, oil driller

Schlumberger

(SLB) - Get Report

was up 2.9% at $43.27, while

Duke Energy

(DKE)

was up 0.8% at $17.23. Shares of beleaguered

Dynegy

(DYN)

were 4.1% higher at 76 cents.

Pharmaceuticals:

The pharmaceutical industry also was banking on GOP control of Congress. It contributed approximately $13.2 million to Republican candidates during the campaign, according to the CRP, since Republicans generally support private-sector prescription drug benefits.

Democratic proposals include prescription drug coverage under the government's Medicare program, which could lead to price controls. That would weaken profits of big drug manufacturers. The GOP victory is likely to protect big pharmaceutical companies from the price caps that it had feared.

Shares of

Merck

(MRK) - Get Report

recently were up 3.1% at $55.82, while

Pfizer

(PFE) - Get Report

was higher by 2.6% at $33.47 and

Eli Lilly

(LLY) - Get Report

was ahead 3.4% at $59.93.

Defense:

President Bush already has bipartisan backing for his Iraq resolution. With a GOP majority in both chambers of Congress, he may get support for an increase in defense spending.

The shakeup in the Senate will transfer key chairs to Republicans. For instance, John Warner, a Republican from Virginia, will take over the Senate's Armed Services Committee chairmanship.

"This should be received as good news for the companies in the defense sector that are directly involved in missile defense programs and shipbuilding because of Senator Warner's interest and strong support in those areas," said David Baker, an analyst in Schwab's Washington research group.

Among defense shares,

General Dynamics

(GD) - Get Report

was up 3.6% at $81.56,

Raytheon

(RTN) - Get Report

was up 3.1% at $30.38 and

Northrop Grumman

(NOC) - Get Report

was higher by 3.7% at $99.99.

Tobacco:

The tobacco industry gave $5.4 million to Republicans, who are kinder to the sector than Democrats, according to the CRP. The GOP win may have tangible benefits for the group.

"If Republicans eliminate the double taxation of dividends, it would help tobacco stocks, such as

Philip Morris

(MO) - Get Report

, which have fairly significant yields," said Robert Campagnino, an analyst at Prudential Securities.

Big tobacco companies, which are mired in legal troubles, would gain an advantage from the appointment of more conservative judges. The industry also might be able to push through more favorable FDA regulations.

Philip Morris was recently trading off 11 cents at $42.58, but

R.J. Reynolds

(RJR)

was up 2.4% at $43.16 and

Loews Group

(LTR)

was ahead 37 cents at $43.75.

Industrials:

Tort reform under a Republican Congress could help industrial companies with asbestos problems.The GOP is likely to push to limit jury awards in asbestos cases, which would help many of those firms.

"Tort reform would help any open ended liability issues," said Levkovich of Salomon Smith Barney.

In fact, industrials with asbestos troubles were outperforming the broader market on Wednesday, with

Halliburton

(HAL) - Get Report

rising 9.8% to $17.88,

Honeywell

(HON) - Get Report

gaining 4.5% to $26.95, and

Georgia Pacific

(GP)

ahead 11% at $15.27.