By Sruthi Shankar
(Reuters) - U.S. stocks rose on Tuesday, as strong earnings and easing of trade tensions lifted materials and industrial sectors but trading volumes were light as uncertainty about the outcome of U.S. midterm elections kept investors on the sidelines.
A political gridlock between the White House and Congress could hinder Trump's pro-business agenda and raise concerns about political instability, but most analysts say this may not be the worst outcome for the stock market.
Many fear there could be a sharp selloff in shares if the Democrats sweep both the House and the Senate. In contrast, stocks may rally on hopes of more tax cuts if Republicans retain control of the House.
"People are trying to figure out how to position for the mid-term election outcome here. The general view is that the outcome is predictable ... the gridlock is somewhat positive and more predictive for markets going forward," said Charlie Ripley, senior market strategist for Allianz Investment Management.
"If we see something that deviates, either a Democratic or a Republican sweep, we will see that play out tomorrow and through the rest of the week."
Trade-sensitive industrial sector <.SPLRCI> rose 1.04 percent after Chinese Vice President Wang Qishan said Beijing was ready to hold discussions and work with the United States to resolve trade disputes.
"I do not want to see a tariff war, that would be bad for the economy and the market. It would diminish some of the effect of high corporate earnings," Morgan said.
At 13:06 a.m. EDT the Dow Jones Industrial Average <.DJI> was up 141.44 points, or 0.56 percent, at 25,603.14, the S&P 500 <.SPX> was up 13.93 points, or 0.51 percent, at 2,752.24 and the Nasdaq Composite <.IXIC> was up 49.99 points, or 0.68 percent, at 7,378.84.
The sector will be under the spotlight, as efforts to lower prescription drug prices that have started under Trump could get more attention should Democrats gain control in Congress.
Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the NYSE and by a 1.78-to-1 ratio on the Nasdaq.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)