By Ryan Vlastelica
NEW YORK (Reuters) - U.S. stocks rose on Wednesday, with the Dow advancing to a record high after the Republican Party took control of the Senate in the midterm elections, as expected, and following a stronger-than-anticipated report on the labor market.
The beaten-down energy sector was among the strongest of the day as a Republican majority could lead to new legislative measures that impact the group. These include approval of oil and gas pipelines and reforms for crude and natural gas export laws.
Energy shares had lagged the broader market recently, suffering massive losses as crude oil prices plunged to a three-year low. The S&P energy index was the only one of ten primary S&P 500 sectors to be negative for the year, though it rose 0.7 percent Wednesday as one of the strongest groups of the day.
Equities rose on relief that the election results were clear, with the upcoming Senate majority party not in doubt.
Investors had been concerned that some close races would be forced into run-offs, an outcome that could have led to weeks of delay in knowing who would control Congress's upper chamber.
"It had looked like some of the races would be very close and that we might not know who controlled the Senate, but in the end the results were pretty decisive," said John Carey, portfolio manager at Pioneer Investment Management in Boston. "That's good news for the industries that had been subject to regulatory issues."
Midterm elections historically correspond with strong equity returns. According to the Stock Trader's Almanac, the average gain for the S&P 500 since 1949 during the fourth quarter of a midterm election is 8 percent. The following first-quarter during the midterm portion of the election cycle is also strong, resulting in a two-quarter average gain of 16 percent, the best of the election cycle.
U.S. private employers added 230,000 jobs in October, more than expected and the most since June, according to the ADP National Employment report. The data could raise hopes for Friday's closely watched payroll report.
Separately, the pace of growth in the U.S. services sector slowed more than expected in October, sliding for a second month to its lowest level since June, according to the Institute for Supply Management's services index.
Time Warner Inc rose 3 percent to $77.20 after it reported revenue growth of 3 percent. Activision Blizzard Inc late Tuesday raised its full-year forecast, sending shares up 3.7 percent to $20.69.
FireEye Inc fell 16 percent to $28.93 a day after the cybersecurity company gave a revenue outlook that was largely below expectations. TripAdvisor Inc dropped 13 percent to $72.56 and was the S&P's biggest decliner a day after posting weaker-than-expected earnings.
At 9:49 a.m. (1449 GMT), the Dow Jones industrial average rose 52.91 points, or 0.3 percent, to 17,436.75. The blue-chip index hit an all-time record at its session high. The S&P 500 gained 7.09 points, or 0.35 percent, to 2,019.19 and the Nasdaq Composite added 2.90 points, or 0.06 percent, to 4,626.53.
Advancing issues outnumbered declining ones on the NYSE by 1,644 to 1,083, for a 1.52-to-1 ratio on the upside; on the Nasdaq, 1,317 issues rose and 980 fell for a 1.34-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 73 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 69 new highs and 23 new lows.
(Additional reporting by Chuck Mikolajczak; Editing by Bernadette Baum)
