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Long lines were being reported by social media users as voting got underway in New York City early on November 3. Storyful

Stocks climbed higher for a second day ahead of Tuesday’s election on hopes that a win by Democratic presidential challenger Joe Biden and a Senate that flips to Democratic control would mean a bigger stimulus package for Americans financially wracked by the COVID-19 pandemic.

“There seems to be a very high likelihood of a Democratic Senate,” says Chris Zaccarelli, chief investment officer of Independent Advisor Alliance.

In early trading, the Dow Jones industrial average rose about 500 points to 27,440 and the Standard & Poor’s 500 index was up 1.6% to 3,361.

Which party controls the Senate, he says, will likely be more critical to the size of any relief measure than whether Biden or President Trump is in the White House, Zaccarelli says. Senate Republicans, he says, have stood in the way of more robust aid. While a Biden victory likely would mean more federal assistance, Trump has shown a willingness to provide a sizeable package.

Lawmakers have been stalled for months over the legislation, with the Democratic-controlled House passing a $2.2 trillion measure in September and Senate Republicans pushing a $500 billion package. The White House proposed a $1.8 trillion bill in a last-ditch effort to reach a deal before the election but it’s unclear if Senate Republicans would go along.

Any package likely would provide more relief for unemployed Americans, struggling businesses and financially stressed states and cities.

“What investors care about is getting a stimulus package into the hands of the American people,” Zacarrelli says, noting the money is needed to support consumer spending and the economy after a $600 weekly federal supplement to jobless benefits expired in late July.  

The S&P 500 index fell 5.6% last week on a surge in coronavirus cases but rose 1.2% Monday as hopes built that the election could resolve the impasse on stimulus.

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