Stocks Higher As Voters Head To The Polls

With voters heading to the polls to elect the 44th President of the United States, stocks are staging a nice rally today. At 10:40AM the Dow was up 247, the Nasdaq was up 40 and the S&P 500 was up 30.

Many expect an Obama win, and to some extent the market has already priced this possibility in. Today's rally could be a 'sell the rumor of an Obama win, buy the fact of an Obama win' reaction. Of course, as we all know, polls aren't always right. Should McCain miraculously pull out a victory, Wall Street may cheer this as his tax policy would likely be more favorable for investors.

Investors will also be interested in the voting in the Congress. If Democrats significantly increase their majority in the Senate and Congress, there will be fears that a left-wing agenda could spell trouble for public companies in Health Care, Pharmaceuticals and others industries.

Whoever wins, investors will be happy to put the election behind them and start working through the oncoming avalanche of negative economic data. The question is how much of this is priced in and when will stocks bottom out. Stocks will likely bottom 6-9 months before the economy bottoms, as it always looks ahead.

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