By Yasin Ebrahim
Investing.com – The Dow climbed Tuesday as value stocks continued their bright start to the week as the U.S. election is finally upon us.
The Dow Jones Industrial Average rose 2.07%, or 447 points. The S&P 500 was up 1.83%, while the Nasdaq Composite added 1.80%.
As U.S. voters hit the polls, former Vice President Joe Biden continues to hold a lead over President Donald Trump, by about 2 to 7 percentage points, according to recent surveys.
In swing states, where the election can be won or lost, the race is tighter.
In recent months, Wall Street has suggested that a Biden victory would boost value stocks as the economy will get a boost from a bigger stimulus package, easing the hit from higher taxes and plans to expand public health care coverage.
Biden has suggested upping taxes to 28% from 20%, though that would still below the 32% rate seen before Trump took office.
Others, however, suggest that a blue wave – the Democrats taking control of both the White House and Congress – may prompt the Fed into hiking rates again.
The effect of a blue wave “could bring the first rate hike by the Fed in from 2024 to 2025 to maybe 2023 to 2024,” Morgan Stanley (NYSE:MS) said.
Industrials and consumer discretionary stocks are among the top gainers today.
Financials were led higher by banking stocks as Treasury yields climbed on hopes that the passing of election uncertainty could refocus lawmakers' efforts on policies that would ensure the economic recovery remains on track.
JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Bank of America (NYSE:BAC) were up more than 3%.
The move higher in banks helped eased weakness in PayPal (NASDAQ:PYPL) after the fintech giant’s better-than-expected results were offset by earnings guidance that disappointed Wall Street.
In other earning news, cash-strapped theater chain AMC Entertainment (NYSE:AMC) rose 9% despite reporting a wider-than-expected quarterly earnings following a 90% plunge in revenue.
‘We give AMC credit for restlessly seeking ways to improve its net debt position and remain afloat. However, we do not expect attendance levels to begin to normalize until mid-2021, which presents a real risk to the industry, and AMC in particular,” Wedbush said in a note as it lowered its price target on the stock to $2.50 from $4.
Technology also played a role in the broader market move higher as the Fab 5 built on their late-day rebound from Monday.
Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) gained more than 1%.