(In the 10th graph, it should read 45th U.S. President, not
* U.S. stocks hold steady with investor cautious
* Dollar index touches 2-month highs on safety bids
* U.S. presidential race stays tight before Tuesday vote
* Eyes also on Chinese leadership, euro-zone debt crisis
* AbbVie raises $15 billion with record U.S. bond deal
By Richard Leong
NEW YORK, Nov 5 U.S. stocks held steady and the
dollar edged up on Monday as investors played it safe on the day
before Americans choose their president and as Greece headed
into two key votes to secure further rescue funds.
Some investors see the U.S. election as a hurdle to get
through so markets can turn attention to the "fiscal cliff"
budget battle. The world's biggest economy faces the possibility
of $600 billion in automatic spending cuts and tax hikes, should
Congress not reach a deal to mitigate its effects.
Opinion polls show the race between President Barack Obama
and Republican challenger Mitt Romney remains neck-and-neck at
the start of the last day of campaigning, and the uncertainty
over the outcome left financial markets jittery.
There is a possibility that the election will be too close
to call in a number of states. A delayed result could roil
markets as it did in the protracted 2000 election battle.
"Given this huge event is so close, now it just makes sense
to wait," said Jack Ablin, chief investment officer of Harris
Private Bank in Chicago.
Delegates at a G20 meeting this weekend in Mexico City
pressed the United States to act decisively on tax and spending
Safe-haven bids pushed the U.S. dollar up about 0.2 percent
to two-month highs against a basket of major currencies
and German two-year government bond yields dropped
below zero for the first time in two months on safety demand.
Demand for low-risk assets pushed the price of the benchmark
U.S. 10-year Treasury note up 10/32 with a yield of
1.688 percent, down 3 basis points from late on Friday.
The general view on Wall Street is that if Obama wins a
second term in the White House, both U.S. economic growth and
interest rates will stay low, which would favor owning bonds
On the other hand, if Romney becomes the 45th U.S.
President, Wall Street reckons his polices will boost corporate
profits and lift stock markets to new highs.
In late afternoon trading, the Dow Jones industrial average
was up 5.26 points, or 0.04 percent, at 13,098.42. The
Standard & Poor's 500 Index was up 1.02 points, or 0.07
percent, at 1,415.22. The Nasdaq Composite Index was up
12.40 points, or 0.42 percent, at 2,994.53.
The FTSEurofirst 300 index of pan-European shares
fell 0.59 percent to close at 1,108.58 points.
The MSCI world shares index slipped 0.25
percent and Tokyo's Nikkei index dropped 0.48 percent
following Friday's Wall Street sell-off.
In commodity markets, Brent crude oil turned higher,
erasing early losses. December Brent futures last traded up
$2.32 at $108.00 a barrel after being bogged down earlier by a
strong dollar and a drop in demand in the wake of Sandy, the
deadly storm that pummeled the U.S. Northeast a week ago.
U.S. December crude oil futures rose 79 cents to
settle at $85.65 a barrel, and then extended the gains after the
close - jumping more than $1 to $85.88 in post-settlement
Sandy disrupted the distribution of gasoline and left
millions without power in the region.
In line with the broader market's caution, gold gained about
0.4 percent to $1,684.20 an ounce after Friday's drop of
BEYOND THE U.S. ELECTION
While monitoring the outcome of the tight race for the White
House, investors were mindful of the leadership transition in
China and the votes in Greece to secure fresh rescue funds.
It was expected that Greek Prime Minister Antonis Samaras'
coalition will muster enough support on Wednesday to win a vote
on structural reforms and a follow-up vote on Sunday on an
austerity budget for 2013.
These fiscal reforms are critical for the debt-laden nation
to receive more financial aid from lenders from an International
Monetary Fund and European Union bailout that has been on hold
since the summer.
"Without the additional funds, the country would be put back
on the path toward an exit from the euro," said Karl Schamotta,
senior strategist at Western Union Business Solutions in
On Thursday, China's ruling Communist party will begin the
18th congress in its history with the culmination a week later
in the expected selection of Xi Jinping to succeed President Hu
Despite worries about these global political developments,
AbbVie Inc. raised $14.7 billion in a record-size
dollar-denominated bond issue, according to IFR, a unit of
Thomson Reuters. AbbVie will house Abbott Laboratories'
proprietary pharmaceuticals business as a part of its plan to
split into two.
(Writing by Richard Leong; Additional reporting by Rodrigo
Campos, Wanfeng Zhou in New York; Marc Jones, William James,
Jessica Mortimer, David Brough in London; Editing by Dan
Grebler, Alden Bentley and Jan Paschal)