US STOCKS-Wall Street closes higher; focus on Georgia election outcome

* Voters head to polling booths in Georgia
* U.S.-listed Chinese firms jump after NYSE flips delisting
* Micron jumps after Citi's double upgrade
* Wall Street's fear gauge slips after Monday's surge

(Adds official closing prices, volume)
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 5 (Reuters) - Shares on Wall Street ended
higher on Tuesday in choppy trading, as investors took advantage
of the previous session's slump to buy them back, ahead of the
outcome of the Senate runoff elections in the battleground state
of Georgia, which will determine the balance of power in
Washington.
Overall, analysts expect the stock market to consolidate
December's gains in January, as asset managers looked to
rebalance their portfolios that had been heavily tilted toward
equities.
The latest polls from data website 538 https://projects.fivethirtyeight.com/georgia-senate-polls
gave a slight edge to the two Democratic challengers who need
to win both races for Democrats to gain U.S. Senate control from
Republicans.
Along with their narrow majority in the House of
Representatives, a "blue sweep" of Congress could usher in
larger fiscal stimulus. It could also pave the way for
President-elect Joe Biden to push through greater corporate
regulation and higher taxes. "Having a divided government is what generally investors
want, whether you're a Democrat or Republican. Investors prefer
checks and balances," said Jack Ablin, chief investment officer
at Cresset Capital Management in Chicago.
"My sense is: we may get some clarity around the runoff by
tomorrow, so why invest today?," he added.
The Cboe Volatility Index .VIX flip-flopped after closing
at its highest level in two months on Monday, which saw Wall
Street's main indexes drop to two-week lows as investors booked
profits at the start of the year. It ended down 6% at 25.34.
The Dow Jones Industrial Average .DJI closed up 167.71
points, or 0.55%, to 30,391.6, the S&P 500 .SPX gained 26.21
points, or 0.71%, to 3,726.86 and the Nasdaq Composite .IXIC
added 120.51 points, or 0.95%, to 12,818.96.
Energy stocks .SPNY jumped 4.5% on the back of higher oil
prices, while healthcare .SPXHC and materials .SPLRCM hit
fresh record highs.
Consumer staples .SPLRCS and utilities .SPLRCU , however,
were the laggards.
"We're somewhat worried about the high expectations (on
stocks) among investors," Cresset's Ablin said. "We looked at
things like bullish sentiment, which is not at an extreme, but
it's certainly higher than normal. Margin balances are also
pretty high, also suggesting a fair amount of complacency."
Although the start of vaccine rollouts and massive monetary
support powered the major U.S. stock indexes to record levels
recently, the discovery of a more contagious variant of the
coronavirus and the latest virus-related curbs have muddied the
economic outlook.
Britain, where the new variant first emerged, began its
third national lockdown, while New York on Monday found its
first case of the highly contagious mutation of the coronavirus.
In terms of economic data, U.S. stocks got a boost from a
survey by the Institute of Supply Management, which showed that
U.S. manufacturing activity rose to its highest level in nearly
2-1/2 years in December, likely as spiraling new COVID-19
infections pulled demand away from services towards goods.
Chipmaker Micron Technology Inc MU.O rose 4.3% after
Citigroup raised its rating on the stock to "buy" on
expectations of a recovery in demand and pricing for DRAM chips.
U.S.-listed shares of China Telecom Corp Ltd CHA.N and
China Mobile Ltd CHL.N gained 8.8% and 9.3%, respectively,
while those of China Unicom Hong Kong Ltd CHU.N advanced
11.8%after the NYSE reversed its decision to delist the stocks.
Advancing issues outnumbered declining ones on the NYSE by a
2.86-to-1 ratio; on Nasdaq, a 2.49-to-1 ratio favored advancers.
The S&P 500 posted 19 new 52-week highs and no new lows; the
Nasdaq Composite recorded 117 new highs and four new lows.
Volume on U.S. exchanges hit 14.37 billion shares, compared
with the 11.09 billion average for the full session over the
last 20 trading days.