Dow Gains 101 Pts as Wall Street Welcomes Bush Victory

NEW YORK – Stocks posted solid gains Wednesday, helped by health and defense companies that are expected to benefit from the re-election of President Bush, but higher oil prices kept those advances under pressure.

The Dow Jones industrial average (search) ended up 101.32 points, or 1.01 percent, at 10,137.05. The Standard & Poor's 500 Index (search) finished up 12.64 points, or 1.12 percent, at 1,143.20. The technology-laced Nasdaq Composite Index (search) rose 19.54 points, or 0.98 percent, to 2,004.33.

The Nasdaq is now 0.05 percent higher for the year, while the S&P 500 is up 2.8 percent, although the Dow is down 3.03 percent. The S&P and Nasdaq both closed at their highest level in just over four months.

Democratic challenger Sen. John Kerry (search) conceded in an extraordinarily close presidential election, buoying Wall Street with the certainty that there would not be a repeat of the 2000 election fiasco.

With Bush seen as more pro-business than Kerry, Wall Street welcomed the prospect of the Republican administration remaining in place for four more years.

"Bush wants to keep taxes down ... and Republicans believe that this is very bullish for corporate profits, and believe it's better for growth of the economy and for jobs," said Robert Robbins, president of Robbins Capital Management.

After weeks of worry that there would be no clear winner, the stock market would likely have gone up either way, but the fact that the victory went to the Republican incumbent might have added to Wall Street's cheer.

"Overall I think the market will be on a better footing with this behind us," said Jay Suskind, head trader at Ryan Beck & Co. "I think now the market gets back to business and says OK, what's the real picture with the economy? You'll see a rally, but then I think you'll also see some profit-taking. A lot of the issues we've all been concerned about are still there. But this was the biggest uncertainty out there, so its back to fundamentals."

In the first piece of post-election economic news, the Commerce Department (search) reported that orders to U.S. factories declined for a second straight month, slipping by 0.4 percent, or $1.3 billion in September to $368.4 billion. Demand dropped sharply for all manufactured goods except defense materials. It was the first back-to-back monthly decline since November-December, and fell far short of the 0.5 percent increase projected by economists.

Lofty energy prices have also weighed heavily on stocks in recent weeks, although crude has stepped back from its record highs over the past several sessions. It was back on the rise following the government's weekly fuel report, however. Initially, a bigger-than-expected 6.3 million barrel run-up in crude supplies seemed to overshadow a 900,000 barrel drawdown in heating oil.

But with traders expecting a slight build, the seventh week of heating oil declines seemed to take a toll, especially in the face of rising concern that high energy costs this winter could cut into consumer spending. Light, sweet crude for December delivery settled up $1.26 at $50.88.

As investors pumped money into equities, U.S. Treasuries were spurned. The benchmark 10-year note fell in price and pushed its yield to 4.08 percent from 4.06 percent late Tuesday.

With the election resolved, several sectors of the market that had come under pressure at the prospect of a Kerry win posted gains. Among these, pharmaceutical stocks, which might have suffered if Kerry had gone through with a plan to import cheaper drugs from abroad. Merck & Co. (MRK) was up $1.07, or 4 percent, at $27.87, and Pfizer Inc. (PFE) added 75 cents, or 2.6 percent, to $29.45.

Defense stocks soared as well as investors anticipated continued spending on military projects overseas. Boeing Co.(BA)  climbed $1.27, or 2.6 percent, to $51.15; General Dynamics Corp. (GD) added $3.79, or 3.8 percent, to $104.27; and Northrop Grumman Corp. (NOC) surged $2.10, or 4.1 percent, to $53.75.

In the midst of the post-election fever, there was also some earnings news influencing trading.

The world's largest media company, Time Warner Inc. (TWX), added 31 cents to $16.59 despite an 8 percent slide in third quarter earnings as it established a $500 million legal reserve and said it will restate results for its AOL Europe unit prior to 2002.

Cigna Corp. (CI) closed up $1.84, or 2.9 percent, at $65.29, after reporting a 64 percent surge in third-quarter income on growth in the health insurer's indemnity business and sales gains in retirement benefits. The company also raised its earnings estimates for the full year.

Trading was heavy, with 1.77 billion shares changing hands on the New York Stock Exchange, above the 1.4 billion daily average for last year. About 1.94 billion shares were traded on Nasdaq, above the 1.69 billion daily average last year.

Advancers outnumbered decliners on the NYSE by about 3-to-1, and about 2-to-1 on Nasdaq.

The Russell 2000 index, which tracks smaller company stocks, was up 9.89, or 1.69 percent, at 595.33.

Overseas, Japan's Nikkei stock average surged 1.43 percent. In Europe, France's CAC-40 added 0.11 percent, Britain's FTSE 100 rose 0.54 percent and Germany's DAX index was up 0.04 percent.

Reuters and the Associated Press contributed to this report.