Stock futures edge higher before elections

[November 02, 2010]  NEW YORK (AP) -- Stock futures rose moderately Tuesday as traders awaited the results of midterm elections that are expected to give Republicans at least partial control of Congress.

An expected win for Republicans in the House of Representatives could set up a scenario that leads to gridlock on Capitol Hill, 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 drifted in a narrow range in recent days. The Dow Jones industrial average is less than two points below where it closed four days ago. Stocks have pushed higher in early morning trading the past few days on upbeat economic and earnings reports only to see that enthusiasm fade.

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 Wednesday 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.

Ahead of the opening bell, Dow Jones industrial average futures rose 24, or 0.2 percent, to 11,114. Standard & Poor's 500 index futures rose 3.80, or 0.3 percent, to 1,186.90, while Nasdaq 100 index futures rose 8.00, or 0.4 percent, to 2,137.00.

Bond prices rose slightly, indicating many investors are still cautious and seeking the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.62 percent from 2.63 percent late Monday.

In corporate news, General Motors is expected to raise $10 billion in an initial public offering as it emerges from a government-funded bankruptcy reorganization. The offering will reduce the government's stake in the automaker to less than 50 percent and much of the money will go toward paying back the government bailout.

[Associated Press; By STEPHEN BERNARD]

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