Nov. 5, 2012 at 3:57 PM ET
Stocks ticked up on Monday as investors played it safe on the day before Americans choose their president and as Greece headed into two key votes to secure further rescue funds.
According to early calculations, the Dow Jones industrial average was up 19.28 points, or 0.15 percent, at 13,112.44. The Standard & Poor's 500 Index was up 3.05 points, or 0.22 percent, at 1,417.25. The Nasdaq Composite Index was up 17.53 points, or 0.59 percent, at 2,999.66.
Some investors see the U.S. election as a hurdle to get through so markets can turn attention to the "fiscal cliff" budget battle. The world's biggest economy faces the possibility of $600 billion in automatic spending cuts and tax hikes, should Congress not reach a deal to mitigate its effects.
Opinion polls show the race between President Barack Obama and Republican challenger Mitt Romney remains neck-and-neck at the start of the last day of campaigning, and the uncertainty over the outcome left financial markets jittery.
There is a possibility that the election will be too close to call in a number of states. A delayed result could roil markets as it did in the protracted 2000 election battle.
"Given this huge event is so close, now it just makes sense to wait," said Jack Ablin, chief investment officer of Harris Private Bank in Chicago.
Delegates at a G20 meeting this weekend in Mexico City pressed the United States to act decisively on tax and spending issues.
Safe-haven bids pushed the U.S. dollar up about 0.2 percent to two-month highs against a basket of major currencies and German two-year government bond yields dropped below zero for the first time in two months on safety demand.
Demand for low-risk assets pushed the price of the benchmark U.S. 10-year Treasury note up 10/32 with a yield of 1.688 percent, down 3 basis points from late on Friday.
The general view on Wall Street is that if Obama wins a second term in the White House, both U.S. economic growth and interest rates will stay low, which would favor owning bonds over stocks.
On the other hand, if Romney becomes the 47th U.S. President, Wall Street reckons his polices will boost corporate profits and lift stock markets to new highs.
In commodity markets, Brent crude oil turned higher, erasing early losses. December Brent futures last traded up $2.32 at $108.00 a barrel after being bogged down earlier by a strong dollar and a drop in demand in the wake of Sandy, the deadly storm that pummeled the U.S. Northeast a week ago.
U.S. December crude oil futures rose 79 cents to settle at $85.65 a barrel, and then extended the gains after the close - jumping more than $1 to $85.88 in post-settlement trading.
Sandy disrupted the distribution of gasoline and left millions without power in the region.
In line with the broader market's caution, gold gained about 0.4 percent to $1,684.20 an ounce after Friday's drop of 2 percent.
While monitoring the outcome of the tight race for the White House, investors were mindful of the leadership transition in China and the votes in Greece to secure fresh rescue funds.
It was expected that Greek Prime Minister Antonis Samaras' coalition will muster enough support on Wednesday to win a vote on structural reforms and a follow-up vote on Sunday on an austerity budget for 2013.
These fiscal reforms are critical for the debt-laden nation to receive more financial aid from lenders from an International Monetary Fund and European Union bailout that has been on hold since the summer.
"Without the additional funds, the country would be put back on the path toward an exit from the euro," said Karl Schamotta, senior strategist at Western Union Business Solutions in Calgary.
On Thursday, China's ruling Communist party will begin the 18th congress in its history with the culmination a week later in the expected selection of Xi Jinping to succeed President Hu Jintao.
Despite worries about these global political developments, AbbVie Inc. raised $14.7 billion in a record-size dollar-denominated bond issue, according to IFR, a unit of Thomson Reuters. AbbVie will house Abbott Laboratories' proprietary pharmaceuticals business as a part of its plan to split into two.
Reuters contributed to this report.