That decisive day in early November when one of two men will be chosen to run the White House for the next four years may seem far off. But where Al Gore and George Bush stand on different issues should begin to play itself out in the U.S. stock market long before that.

In fact, it's the outcome of the next round of polls that investors will really want to watch. The candidate significantly ahead in the polls just after Labor Day has won every presidential election for the past 50 years. And, while recent polls show Gore with a slight lead, it often takes poll results a few weeks to settle following national conventions, which were held just last month.

"Historically, stocks begin to price in election outcomes after Labor Day, so investors will be looking at these polls pretty closely," said Andy Laperriere, associate managing director for market research firm

International Strategy & Investment Group

.

Charles Gabriel, political analyst for

Prudential Securities

, agreed.

"The conventional wisdom is that the public doesn't focus on elections until Labor Day anyway. I think we're just beginning to see the potential for swings in stocks based on what investor sentiment and business media see as those industries that will do better under Bush and Gore," said Gabriel.

A couple of weeks ago the market saw the first of such swings. A few lofty words from Al Gore in his nomination acceptance speech at the

Democratic National Convention

sent investors scrambling to unload drug stocks. Gore railed against "big business," shaking his finger hardest at pharmaceuticals and managed health care companies. The

American Stock Exchange Pharmaceutical Index

, which tracks pharmaceutical stocks, fell 2.1% the next day.

Meet the New Boss...

Meanwhile, unlike 1996, this is no "status quo" election. And a new president means new policies. Several of the candidates' legislative proposals could have a significant impact on different business sectors, and stocks. Most strategists agreed that a Gore lead and win would likely be hardest on drug, health care, energy and defense stocks, but a report by Gabriel outlines a list of Gore stocks and Bush stocks.

War on Drugs

It's hard to say whether health care and drug stocks will continue to suffer at the hands of the Gore campaign. As Gore has won voter support on the issue, Bush has jumped in to offer his own alternative. Bush recently claimed that by greatly increasing government spending in the sector, states would be able to negotiate significant discounts on drugs.

Still, Gore should be much harder for drug stocks to swallow. Gore has repeatedly criticized the drug industry for reaping massive profits from pricey prescription drugs at the expense of the elderly. And he has vociferously championed the generic drugmakers. That support could translate into patent policies that would allow those companies to bring copycat products to market more quickly. And that's bad news for established drugmakers like

Pfizer

(PFE) - Get Report

, but good news for generic drugmakers like

Abbott Laboratories

(ABT) - Get Report

.

TheStreet.com

wrote about the drug policies of both candidates in a separate

story.

At least one strategist thinks investors aren't taking the

Democrats'

stand on health too seriously, following the Clinton administration's failure to follow through on health care reform.

"Once they have withstood the

Hillary

Clinton threat under the

Clinton administration, investors will probably discount the Democrats' threats. ... These stocks have gone through similar threats before, so I don't think it's a big deal," said Michael Scarlatos, policy and government strategist at online market research firm

IDEAglobal.com

.

Trust Busters

If Gore continues to look like the White House winner, he could also put some pressure on the legally oppressed -- companies like

Microsoft

(MSFT) - Get Report

and tobacco stocks like

Philip Morris

(MO) - Get Report

, which have become poster boys for big business.

Gore has continued to roll out his big-business bashing since his convention speech, and strategists expect him to extend what is seen by some as a vilification of the tobacco industry and other big business by the Clinton administration. He is also seen carrying out the government's current case against Microsoft.

But Bush could ease up on or let go of the government's lawsuit against the software Goliath, possibly allowing for a more shareholder-friendly settlement in the latter case.

"While Al Gore didn't, as far as I know, play a role in encouraging former Netscape executive Jim Barksdale to look to Washington to constrain Microsoft ... It does seem far more plausible to me that a Gore administration would do nothing to goad

Justice

toward a more lenient compromise with

Bill Gates

TST Recommends

and company, while Bush arguably would," said a report on Gore stocks by Prudential's Gabriel.

Bush would likely also drop plans for a federal case against the tobacco companies, ISIG's Laperriere said. Tobacco stocks went on a heady run midsummer, and the

American Stock Exchange Tobacco Index

rose almost 30% between July 17 and Aug. 17, when Bush's poll numbers suggested he had his widest lead against Gore. But the index has been stuck in a range since then.

"The federal government is currently preparing a lawsuit against the tobacco companies, but it is unlikely that Bush would launch a suit," he said.

Meanwhile, a tougher case against Microsoft under Gore could help "speed along the migration from desktop systems to wireless Internet communications," aiding the likes of

Sun Microsystems

(SUNW) - Get Report

and

America Online

(AOL)

, according to Gabriel.

Testosterone Stocks

While defense stocks have already enjoyed favor under the Clinton administration's peacetime defense buildup, they could be expected to get even more of a boost from Bush, who is seen making some major multiyear funding increases.

And, as a former Texas oilman, Bush can hardly be bad for energy stocks. Gore, on the other hand, continues to use his rhetoric against the big oil companies and remains marked by the Clinton administration, which, some feel, allowed the energy sector to atrophy. So expect a general lift for energy stocks if Bush pulls ahead in the polls and wins.

"The growing consensus is that the sector has become woefully undercapitalized on Clinton's watch, constipated by the administration's dual focus on environmental policy and renewables," said Gabriel.

Energy sector stocks have been on a run lately due to soaring oil prices, but downgrades on sector stocks on Aug. 24 from

J.P. Morgan

and

Morgan Stanley Dean Witter

sliced 2.8% off the

American Stock Exchange Oil & Gas Index

that day, and 1.7% off the

Philadelphia Stock Exchange Oil Service Index

, while the

American Stock Exchange Natural Gas Index

ended the day 2.3% lower. J.P. Morgan and Morgan Stanley said the stocks had become overvalued due to the rise in oil prices.

A Few for Gore

While it may seem that Gore wouldn't do much for the stock market, there are some environmental remediation and consulting firms, satellite exporters and farm equipment stocks that could benefit under Gore, according to Gabriel. On the environmental front, Gore would be more likely to push through Superfund legislation, which could create financing for the cleanup of hundreds of hazardous waste sites.

Satellite exports could be reinvigorated, meanwhile, since the Democrats were responsible for opening up that market, while a

Republican

-controlled

Congress

passed legislation restricting such exports in 1998.

And Democrats have begun chattering about returning to an income-maintenance program to make farm income more stable, which could "boost confidence enough to increase sales of farm equipment," said Gabriel.

Financials

Finally, financials will probably look good no matter how the dice are rolled because of optimism that the

Federal Reserve is done raising interest rates. Certainly, Bush's market-based plans for Social Security and student loan reforms could, at the very least, allow recent strength in financials to continue.

But, a Gore win wouldn't necessarily put the breaks on financial stock prices either.

Insurance stocks,

Fannie Mae

and

Freddie Mac

could get a boost from a continuing Gore lead.

Legislation to create a federal insurance charter, as a "cost-saving, industry-friendly alternative to the existing state-chartered regime" might fare better under the Democrats, according to the report, which could give insurance stocks a bit of an upside under Gore.

And while a Republican-sponsored bill to limit the lending power of Freddie and Fannie has not garnered much support in Congress, the perception that it will gain support has grown, and the companies' staunchest defenders in Washington are the Democrats.

Insurance companies have been trading in a relatively narrow range over the past month, but the

S&P Insurance Index

, which tracks the sector, is up 19% on the year.