(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* Banks, construction companies rise before the bell
* Arista climbs as profit tops estimates
* PayPal down as earnings target falls short of expectations
* Indexes up: Dow 2.06%, S&P 1.74%, Nasdaq 1.57%
(Updates to market open)
By Medha Singh
Nov 3 (Reuters) - U.S. stocks jumped on Tuesday as investors
bet that one of the country's most divisive presidential races
would end with a clear victory for Democratic nominee Joe Biden
and a swift deal on more fiscal stimulus.
All 11 major S&P indexes were up in early trading, led by
financial .SPSY , healthcare .SPXHC and industrial .SPLRCI
stocks.
The consistent lead for Biden in national opinion polls has
raised hopes of a decisive outcome in Tuesday's election as well
as a bigger stimulus package post-election, analysts and
portfolio managers said, even as both campaigns are preparing
for post-election disputes. "Markets are expecting not only a clear Biden victory but
also a policy reaction that is quite reflationary and one that
will come with more fiscal spending," said Chris Bailey, Raymond
James strategist in London.
Democrats are also favored to emerge from 14 hotly contested
U.S. Senate races with full control of Congress in Tuesday's
election, although final results from at least five of those
contests may not be available for days, and in some cases,
months. Still, the competition in swing states is seen as close
enough that President Donald Trump could piece together the 270
Electoral College votes he needs to stay in the White House for
another four years. Despite a coronavirus-driven crash earlier this year, the
S&P 500 has risen about 55% since Trump clinched an upset
victory in 2016 as lower tax rates under his administration
boosted corporate profits.
The CBOE volatility index .VIX , known as investors' fear
gauge, retreated for a second day after touching a 20-week high
last week on surging coronavirus cases globally.
Kim Forrest, chief investment officer at Bokeh Capital
Partners in Pittsburgh, said a Biden victory could lead to some
inflation, which would be beneficial to banks in particular.
"A Federal Reserve committed to keeping rates lower and yet
allowing not a flat curve but one with some steepening to it,
and then some inflation and you get yourself a hip hip hooray
for banks."
The S&P banking subindex .SPXBK surged 2.6% to its highest
in more than a week, while industrials Caterpillar Inc CAT.N
and Honeywell International Inc HON.N rose about 2% each.
By 10:11 a.m. ET, the Dow Jones Industrial Average .DJI
was up 553.70 points, or 2.06%, at 27,478.75, the S&P 500 .SPX
was up 57.67 points, or 1.74%, at 3,367.91, and the Nasdaq
Composite .IXIC was up 171.87 points, or 1.57%, at 11,129.49.
Technology .SPLRCT and communication services .SPLRCL
stocks, which powered Wall Street's rally from the
coronavirus-driven slump in March, were among the smallest
gainers. Arista Networks Inc ANET.N jumped 18.6%, among the leading
gainers on the benchmark S&P 500, after the network-gear maker
reported a better-than-expected quarterly profit.
PayPal Holdings Inc PYPL.O reported better-than-expected
quarterly results, boosted by a surge in digital payments.
However, its shares dropped 3.1% after more than doubling in
value since March. Advancing issues outnumbered decliners 7.52-to-1 on the NYSE
and 5.34-to-1 on the Nasdaq.
The S&P index recorded 14 new 52-week highs and no new low,
while the Nasdaq recorded 33 new highs and 11 new lows.
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"Biden" shares vs "Trump" shares https://tmsnrt.rs/3881PWc
Markets under different presidents during history https://tmsnrt.rs/3p35jj4
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