NEW YORK — Investors believing that Wall Street is on the verge of a year-end rally piled into the market Tuesday, brushing off more weak economic data while they scarfed up stocks and propelled the Dow Jones industrials up 300 points to its highest close in four weeks.
It was the biggest Election Day rally ever for the Dow, which rose 3.28 percent and topped the 1.2 percent gain seen in 1984 when Ronald Rea gan defeated Walter Mondale. Before 1980, the market was closed on Election Day.
Broader market indexes were also up more than 3 percent Tuesday.
Some analysts said the market rose on relief that the presidential election was about to be decided. But others said investors were anticipating a year-end recovery from Wall Street’s huge sell-off and bought to be sure they didn’t miss out on its start.
“I seriously doubt it has much to do with the election, other than we’re all looking forward to it being over,” said independent investment strategist Edward Yardeni.
The fact that Wall Street is in the final stretch of a tough year is probably lifting stocks more than the elections, he said.
“It’s almost been a classic textbook crash in September and October followed by a year-end rally,” Yardeni said.
Steven Goldman, chief market strategist at Weeden & Co., said, “Historically, we were at the most oversold levels since October 1974.”
There’s still a feeling the market might fall back and retest the trading lows reached Oct. 10 before entering a true bull market. But it’s possible that a retrenchment won’t happen until 2009 — in similar oversold markets in 1974 and 2002, Goldman said, the return to the lows of the bear market did not happen until two months later.
Analysts predict stocks are headed for a recovery no matter who is elected, as the policies of both John McCain and Barack Obama likely will be guided by the weak economy and the recent flood of government support designed to keep the global financial system from collapsing.
The market again looked past a downbeat economic report, as it did Monday, when investors calmly received a report of a big slowdown in manufacturing before the Dow finished essentially flat. The benchmark index is coming off an 11.3 percent rise last week, its best weekly gain in 34 years.
“The risk of a depression is off the table,” said Ben Halliburton, chief investment officer of Tradition Capital Management.
The Dow rose 305.45, or 3.28 percent, to 9,625.28. The Dow last closed above 9,500 on Oct. 6, when it finished at 9,955.50.
The broader indexes also rose. The Standard & Poor’s 500 index gained 39.45, or 4.08 percent, to 1,005.75, its first close over the 1,000 mark since Oct. 13.
Post-Election Day moves for the Dow
How the Dow Jones industrials have fared the day after a presidential election:
1992
-29.44 Bill Clinton elected
1996
+96.53 Bill Clinton re-elected
2000
-45.12 Results unclear
2004
+101.32 George W. Bush re-elected
