US STOCKS-Wall St gains as big Republican win seen

* Republicans poised to win House control, gain in Senate

* Energy stocks among the day’s gainers

* Fed’s Wednesday decision eyed, expectations high

* Dow up 0.6 pct, S&P up 0.8 pct, Nasdaq up 1.1 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates close, changes byline)

By Ryan Vlastelica

NEW YORK, Nov 2 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) rose on Tuesday on
the expectation the midterm election and a Federal Reserve
decision would create a more business-friendly environment,
though many traders forecast a selloff in the days ahead.

The S&P 500 index has risen almost 14 percent since
September on speculation of Republican congressional gains and
new measures by the Federal Reserve to stimulate the economy.

“I wouldn’t be surprised to see us sell off tomorrow,” said
Bruce McCain, chief investment strategist at Key Private Bank
in Cleveland, Ohio. “At this point, the market has built in a
lot of positive expectations.”

Most polls show Republicans regaining control of the House
of Representatives, while President Barack Obama’s Democrats
could be left with a narrow majority in the Senate. For
details, see [ID:nN01165335] and [ID:nN01159856]

A divided Congress is typically seen as bullish for stocks
as it makes passing new laws harder and lessens uncertainty for
business. McCain said that if Republicans regain control of the
Senate, though unlikely, there could be further stock gains on
Wednesday.

Energy stocks were the second best performer among the 10
S&P sectors, rising 1.1 percent. Republicans, traditional
supporters of the oil industry, are viewed as less likely to
pursue regulations that would hurt profits. A 1.1 percent rise
in oil prices on Tuesday also helped the sector.

The Dow Jones industrial average (.DJI: ) was up 64.10
points, or 0.58 percent, at 11,188.72. The Standard & Poor’s
500 Index (.SPX: ) was up 9.19 points, or 0.78 percent, at
1,193.57. The Nasdaq Composite Index (.IXIC: ) was up 28.68
points, or 1.14 percent, at 2,533.52.

The Fed is expected to announce a program of asset
purchases of at least $500 billion via quantitative easing —
in effect printing money to buy bonds and lower borrowing
costs. A statement is expected on Wednesday after a two-day
meeting by the U.S. central bank. For a special report, see
http://link.reuters.com/pyb23q

“Unless the election deviates markedly from expectations,
attention will shift fairly rapidly to the Fed tomorrow since
there’s been so much speculation about quantitative easing,”
McCain said.

The U.S. dollar fell 0.7 percent against a basket of
currencies (.DXY: ). The greenback and the S&P 500 have
established a close inverse correlation in recent weeks. Their
30-day correlation stands at -0.84, with -1 being a perfect
inverse correlation.

In earnings news, MasterCard Inc (MA.N: ) jumped 2.9 percent
to $245.98 after it reported a third-quarter profit (Read more your timing to make a profit.) that beat
expectations, but Kellogg Co (K.N: ) fell 2.2 percent to $49.63
after it forecast weaker-than-expected earnings growth in 2011.
[ID:nN02200808] and [ID:nN02174771]

The CBOE Volatility Index (.VIX: ), Wall Street’s favorite
barometer of investors’ fear, slid 0.6 percent after six days
of gains.

About three stocks rose for every one that fell on the New
York Stock Exchange, while on the Nasdaq, more than two stocks
rose for every one that fell.

(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)

US STOCKS-Wall St gains as big Republican win seen