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Tuesday, November 6, 2012

US Stocks end slightly higher as election looms (ext.CNN)

NEW YORK (CNNMoney) -- U.S. stocks closed higher Monday, as investors await the outcome of an uncertain U.S. presidential election.

The Dow Jones industrial average added 0.1% and the S&P 500 gained 0.2%. The Nasdaq rose 0.6%.

The latest CNN poll indicates a dead heat in the race for the White House, with 49% of likely voters questioned in support of President Obama and an equal amount saying they back former Massachusetts governor Mitt Romney.

Investors are cautious ahead of the elections because the results will set the tone for the debate over how to address the fiscal cliff and the nation's growing debt levels. A survey by CNNMoney showed 60% of investment strategists and money managers agreed that the pending fiscal cliff poses the biggest threat to stock market. Washington's failure to address the fiscal cliff -- the simultaneous onset of tax increases and spending cuts that will be triggered on Jan. 1 -- could push the country back into recession and drive unemployment higher.

"There's a bit of nervousness in market, but it's relatively quiet in terms of economic data and earnings," said Paul Zemksy, head of asset allocation at ING Investment Management. "So it's hard to come up with something to focus on besides politics."

Investors were also keeping a wary eye on the situation in Europe.

Greek lawmakers are expected to vote this week on reforms aimed at securing much-needed financial support for the debt-stricken nation. Spain was also in focus Monday after reports in German and U.S. newspapers said the European Central Bank is investigating whether its requirements for Spanish Treasury bills used as collateral are too relaxed. The ECB meets Thursday for its monthly policy discussion.

Though the U.S. election will garner the most attention this week, investors will continue to keep tabs on economic data and corporate earnings.

The Institute for Supply Management said its services sector index fell to 54.2 in October, down from 55.1 in September. It was expected to come in at 55, according to a survey of economists by Any reading above 50 indicates expansion in the services sector.

Currencies and commodities: The dollar was higher against the euro and the British pound but fell slightly versus the Japanese yen.

Oil for December delivery rose 79 cents to settle at $85.65 a barrel.

Gold futures for December delivery added $8 to end at $1,683.20 an ounce.

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