Major stock indexes rose Tuesday as investors awaited the results of Congressional elections, putting the Dow Jones industrial average near its highest point of the year.
The Dow Jones industrial average rose more than 60 points. The Dow has now traded above its 2010 closing high of 11,205 four times over the past two weeks but failed to close above that level each time.
Small companies performed especially well. The Russell 2000, the index that tracks the performance of smaller corporations, jumped 2 percent to 712.89. The index is up nearly 14 percent for the year, roughly double the return of the Dow and the broad Standard and Poor's 500 index.
Uncertainty over the effects of the midterm elections and the size of the Federal Reserve's expected stimulus program due Wednesday have kept the market from ending with either big gains or losses in recent days.
Eric Thorne, an investment adviser with Bryn Mawr Trust Wealth Management, said many traders have been using the end of the day to take short-term profits. With the economy still looking weak, there's no guarantee stocks will continue to climb.
An expected win for Republicans in the House of Representatives could set up a scenario that leads to gridlock in Congress, meaning there could be a slowdown in new government spending and regulatory reform.
Exactly how the election will play out is still uncertain, which is part of the reason stocks have wavered recently. Analysts say companies have avoided hiring new workers because of questions surrounding taxes and costs associated with health care and financial regulatory overhauls. Election results could provide some more clarity about those issues.
High unemployment remains one of the biggest obstacles to a strong recovery. The government said last week that the gross domestic product, the broadest measure of the nation's economy, grew at a 2 percent annual rate during the third quarter. That's well short of what is needed to create a significant amount of jobs.
Traders are also waiting for the Federal Reserve to wrap up a meeting where it is expected to announce plans to stimulate the economy. There is uncertainty about exactly how big a bond-buying program the Fed will announce, which has also tempered movements in stocks in recent days.
The Fed's purchase of Treasurys hurts the value of the dollar, which fell 0.7 percent today against an index of six other currencies. A weaker dollar, in turn, drives the price of gold, oil and other commodities higher. Companies tied to commodities, including Freeport-McMoRan Copper & Gold Inc., ExxonMobil Corp. and Alcoa Inc., rose more than 1 percent.
The Dow rose 64.10, or 0.6 percent, to close at 11,188.72. It reached its closing high of 11,205.03 on April 26.
The broader Standard & Poor's 500 index rose 9.19, or 0.8 percent, to 1,193.57. The S&P 500, which is more closely watched than the Dow by professional investors, is also still below its 2010 high of 1,217.28, reached on April 23.
The Nasdaq composite index rose 28.68, or 1.1 percent, to 2,533.52.
The Australian dollar rose just above $1.00 as the country's economy and currency benefit from rising commodity prices.
Bond prices rose slightly as investors anticipate the Fed ramping up purchases of government debt in the coming days. That drove the yield on the benchmark 10-year Treasury note down to 2.59 percent from 2.63 percent late Monday.
Pfizer Inc. shares dipped after its third-quarter revenue fell short of forecasts. The pharmaceutical company did, however, beat profit forecasts for the quarter and raised its full-year outlook.