LONDON (Reuters) –
Stock futures pointed to a higher start on Wall Street on Tuesday as Democrat Barack Obama and Republican John McCain face the verdict of U.S. voters.
Futures for the Dow Jones industrial average, the Nasdaq 100 and the S&P 500 share indexes were up 1.75-2 percent. Obama leads McCain in five of eight key battleground states as Americans vote in the White House race, according to a series of Reuters/Zogby polls released on Tuesday.
"A lot hinges on the flavour of what the stimulus (from Obama) is. If it's going to be just tax cuts, in which case people are going to look at some of the discretionary end of the consumer spend. People could say that potentially leisure and retail could do well," said Philip Lawlor, chief portfolio strategist at Nomura, London.
"My read is that it's going to be a big package of $150 billion but it's much more skewed toward infrastructure, in which case once the legislation starts to come through people will realize this has to be beneficial for the construction stocks and material stocks," he said.
"If it were for McCain and the Republicans, they would write a $5,000 check to each household and say it's up to you on how you are going to spend it. Obviously, the market would then say even if they save half of that, it's still going to be a lot of money that can go into additional consumption expenditure and durables," added Lawlor.
At least 130 million Americans are expected to cast votes on a successor to unpopular Republican President George W. Bush and set the country's course for the next four years on the economic crisis, wars in Iraq and Afghanistan, an overhaul of health care and other issues.
The first polls begin to close in parts of Indiana and Kentucky at 6 p.m. EST on Tuesday. Voting ends over the next six hours in the other 48 states.
In earnings news investors are likely to focus on full October same-store sales from Walgreen (WAG.N), third-quarter results from Papa John's International (PZZA.O) and fourth-quarter results from Emerson Electric (EMR.N).
Meanwhile, in after hours trading MasterCard (MA.N) shares jumped nearly 5 percent to $150.92 on Monday after the credit card company's third-quarter results beat analyst expectations.
Viacom (VIAb.N) stock jumped 4 percent to $20.8 in after-hours trade on Monday after the media company's third-quarter profit beat expectations.
Shares of Principal Financial Group (PFG.N) dropped 8.2 percent to $20.55 in after-hours trade after the life insurer posted its third-quarter results.
U.S. stocks ended little changed on Monday as investors picked up bargains on signs of further easing in the credit markets, but were unwilling to place big bets before the presidential election.
On Monday, the Dow Jones industrial average (.DJI) ended down 0.06 percent, the Standard & Poor's index (.SPX) was off 0.25 percent and Nasdaq Composite index (.IXIC) added 0.31 percent.
(Additional reporting by Dominic Lau; Editing by David Cowell)