Business

(AP) The Dow Jones industrial average marched further into record territory Tuesday as investors, anticipating a business-friendly outcome of the mid-term elections, bought stocks across the market.

The election could strip power from Republicans in the House of Representatives for the first time since 1994. Stocks often rally on elections as Wall Street bets change will lead to an environment more favorable to business; the theory on the Street is that a split in power in Washington will create legislative gridlock, slowing down regulatory change.

"Gridlock is good, Wall Street doesn't like change," said Charles Gabriel, senior Washington analyst for Prudential Securities. "You're not going to have runaway spending increases, you won't have a repeal of the Bush tax cuts, and there's no legislative change that will roil industries. The green light is on for equity investments because you've got protection against any major changes."

Indeed, enthusiasm about the elections pushed the Dow to a new trading high of 12,196.32 from its previous record of 12,167.02. The highest close for blue chips was 12,167.02 on Oct. 26.

Boeing Co. was one of the Dow's biggest gainers after the world's second-biggest aircraft maker won a $2.3 billion order from FedEx Corp. Toyota Motor Corp. climbed on a 26 percent jump in quarterly profit, while Emerson Electric Co. soared on a 26 percent jump in quarterly profit.

In midafternoon trading, the Dow rose 68.43, or 0.57 percent, to 12,173.98.

The jump comes after the Dow had its best day in a month on Monday, adding 119 points after a spate of merger announcements soothed investors who worried last week about an economic slowdown. The two-day blue chip rally shows investors remain resilient, and feel the market still has more room to rally.

Broader stock indexes also advanced. The Standard & Poor's 500 index rose 5.09, or 0.37 percent, to 1,384.87, and the Nasdaq composite index added 16.63, or 0.66 percent, to 2,381.58.

Bonds gained, with the yield on the benchmark 10-year Treasury note falling to 4.65 percent from 4.70 percent late Monday. The dollar was mixed against other major currencies, while gold prices rose.

Oil prices again dipped below the $60 mark. A barrel of light sweet crude declined $1.02 cents to $59.00.

The broad advance in equities on Tuesday came despite fresh evidence of a further slowing of the housing market. Both Toll Brothers Inc. and Beazer Homes USA Inc. handed Wall Street disappointing quarterly results, and a sour outlook for next year.

Toll Brothers fell 15 cents to $27.90 after it forecast a 10 percent drop in quarterly home building revenue. Beazer Homes posted a 44 percent decline in fourth-quarter earnings due to lower demand for new homes, and said there was "significant" discounting in most markets. However, investors pushed shares up 29 cents to $42.23.

Boeing rose $3.09, or 3.8 to $83.57 after FedEx announced it will acquire 15 new 777 freighter aircraft, with options to double that order. FedEx said it decided to buy the Boeing aircraft came after rival Airbus announced significant delays for delivery of its A380 jets. FedEx shares rose 84 cents to $114.78.

Toyota rose $2.12 to $121.58 after the automaker reported that strong sales in North America and Europe drove profits higher during its fiscal second quarter. The results helped put the company on pace to overtake General Motors Corp. as the world's biggest automaker.

Emerson rose $6.17, or 7.5 percent, to $88.73 after the diversified manufacturer posted strong fourth-quarter results, raised its dividend and announced a stock split. The company also said it expects a double-digit profit increase in 2007.

The Russell 2000 index of smaller companies was up 3.77, or 0.49 percent, at 766.85.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.06 billion shares.

Overseas, Japan's Nikkei stock average closed up 0.18 percent. At the close, Britain's FTSE 100 was up 0.31 percent, Germany's DAX index rose 0.49 percent, and France's CAC-40 added 0.66 percent.

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