Stock Futures Heat Up as the Vote for President Begins

NEW YORK ( TheStreet) -- Stock futures were holding onto gains Tuesday as investors looked to the U.S. presidential election and cheered better-than-expected earnings reports from companies such as AOL ( AOL) and CVS Caremark ( CVS).

Investors also will be keeping a close eye on the U.S. congressional races, with the results particularly important in connection with handling the looming fiscal cliff. With many expecting Congress to remain divided, economists at Bank of America are anticipating "a prolonged negotiation process" on this issue.

Futures for the Dow Jones Industrial Average were rising 32 points, or 36.56 points above fair value, at 13,085. Futures for the S&P 500 were up 4.8 points, or 4.34 points above fair value, at 1416. Futures for the Nasdaq were up 11.25 points, or 6.29 points above fair value, at 2673.

"Equity markets in presidential election years do not follow a consistent pattern like markets in midterm election years. However, median equity performance in the weeks following very competitive elections slightly outpaces performance following less competitive contests," Jan Hatzius, chief U.S. economist at Goldman Sachs, said in a note. "That said, this election is unusual in that it will be immediately followed by debate on the fiscal cliff, and thus resolution of the election will reduce, but not eliminate, policy uncertainty."

Hatzius cautioned that "given that pre-election polling indicates that, at least at a national level, this election is closer than most others over the last 50 years, there is a clear risk that the results may not be known by the end of Nov. 6."

The most recent polls suggest that President Barack Obama has a slight lead over Republican candidate Mitt Romney in major swing states.

"A Democrat victory in the Senate will mean another divided Congress that may once again descend into partisan bickering with little or nothing to show for it. If the sun shines on the Republicans, however, the GOP will control Congress and be able to usher through their legislative favorites," noted noted Doug Cote, chief market strategist at ING Investment Management.

Overseas markets were trading mixed Tuesday. The FTSE 100 in London was rising 0.54%, while the DAX in Germany was gaining 0.44%, even as concerns about the eurozone flared up again with anxiety about Greece's ability to access more financial aid.

Japan's Nikkei average finished down 0.36% and Hong Kong's Hang Seng closed down 0.28%.

Gold for December delivery was rising $8.90 to $1,692.10 an ounce at the Comex division of the New York Mercantile Exchange, while December crude oil contracts were up 79 cents at $86.44 a barrel.

The benchmark 10-year Treasury fell 3/32, pushing the yield up to 1.7%. The dollar was down 0.13%, according to the U.S. dollar index .

In corporate news, shares of AOL were popping by more than 3% in premarket trading after the Web content company booked stronger-than-anticipated third-quarter earnings, helped by the most robust growth in advertising in seven years.

CVS Caremark shares were adding more than 2% after the pharmacy health care provider hiked its full-year profit guidance and reported third-quarter earnings that were better than estimated, amid optimism about its pharmacy-services business.

Express Scripts ( ESRX) shares were plunging more than 12.5% after the pharmacy benefit manager reported Monday a 20% increase in third-quarter profit but warned that 2013 could bring a weaker business climate.

Zillow ( Z) , the real estate information company, on Monday gave a soft revenue outlook for the final quarter of 2012.

The company also announced a small acquisition, spending $12 million in cash and 150,000 restricted shares to purchase Mortech, a Lincoln, Neb.-based mortgage software and services company.

Shares were plunging more than 16.5%.

Nike ( NKE) is close to a deal to sell its Cole Haan brand to Apax Partners for about $500 million, The New York Times reported. A deal could be announced next week, according to two people briefed on the matter, the newspaper said.

Shares were up 0.37%.

Stock exchange operator NYSE Euronext ( NYX) said Tuesday that third-quarter net revenue declined 21% to $559 million amid weaker trading in the U.S. and Europe. Net income fell 42%.

-- Written by Andrea Tse in New York.

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