US stocks close higher on polling day 2018

US stocks closed higher on Tuesday as industrial and technology companies recovered some of the heavy losses they suffered in October. High profits also contributed to the gains.

The S & P 500 index closed up 0.6%, to 2,755. The Dow Jones Industrial Average Index gained 173 points, or 0.7%, to close at 25,635 points. The Nasdaq composite had 47 points, closing at 7,375.

CVS Health jumped 5.7% and Booking Holdings, the parent company of Priceline.com, grew 4.2%. Energy companies traded lower as oil prices continued to fall, resulting in four weeks of losses.

After the worst month of October in six years, the stock markets have calmed down in recent days as traders await the results of the mid-term elections. This is the control of the House of Representatives and the Senate, as well as 36 governors.

Stocks tend to fall before the mid-term elections, then meet once the vote is over. Over the last fifty years, the S & P 500 Index has generated an average return of 16% in the year following a mid-term election, according to Capital Economics.

Some of the most dramatic reactions to the elections could be observed in the health care sector, as Republicans may again attempt to eliminate the 2010 Affordable Care Act if they kept control of the House and of the Senate. "If the Democrats come to the House, the Affordable Care Act will not be threatened with repeal," said Alicia Levine, chief market strategist at BNY Mellon Investment Management. "If we see the Democrats grabbing governors, you will also see the expansion of Medicaid."

A majority of the Democratic House could work with the administration to try to reduce drug prices and take a more lenient approach to the benefits of food stamps. This could help big box stores and grocery chains, which derive a lot of revenue from these programs.

According to Levine, if the Republicans kept control of the House, they could index capital gains taxes based on inflation, which would effectively reduce these taxes. This could stimulate the economy, but it would also encourage the Federal Reserve to raise interest rates at a faster pace, and investors are already worried that rates will rise too quickly.