Posted By: Brad Martin

By Ellis MnyanduTue Nov 7, 7:11 AM ET

NEW YORK (Reuters) - Stock futures pointed to a flat to
slightly higher start on Wall Street on Tuesday, with investors
wary of making big bets on stocks as voting begins in
congressional elections, which could tip the balance of power
in Washington.
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Opinion polls show Democrats could recapture control of the
House of Representatives from Republicans for the first time
since 1994, with Senate control hinging on several races that
are too close to call.

If the election results in political gridlock, as some on
Wall Street anticipate, analysts say that could be a near-term
positive for stocks as there would likely be fewer government
policy initiatives.

"We've got elections, so it's not a surprise that we're not
seeing a lot of action in early trade," said Arthur Hogan,
chief market analyst at Jefferies & Co. in Boston.

The possibility of gridlock "means we won't get any major
changes in fiscal policy or new major initiatives, and the
market tends to celebrate that."

Since 1934, the Dow Jones industrial average (^DJI - news) has
gained about 2.9 percent on average during the eight trading
days surrounding the election, according to the Stock Trader's
Almanac.

S&P 500 futures were up 1.2 points, above fair value, a
mathematical formula that evaluates pricing by taking into
account interest rates, dividends and time to expiration on the
contract.

Dow Jones industrial average futures rose 19 points, and
Nasdaq 100 futures gained 2.5 points.

Polls start to close at 6 p.m., but it could be hours
before results are known in many crucial races.

Stocks to watch, include Verizon Communications Inc. (NYSE:VZ - news)
after the Wall Street Journal reported the No. 2 U.S.
telecommunications company was in advanced talks with YouTube
Inc. to bring the Website's videos to cell phones and
television sets.

Tax preparer H&R Block Inc. (NYSE:HRB - news) may be in the spotlight
after it cut its profit forecast late on Monday and announced
it was mulling a sale of its mortgage unit.

Before the bell, Toll Brothers Inc. (NYSE:TOL - news) forecast a 10
percent drop in quarterly home building revenue, which is below
Wall Street estimates.

On Monday, U.S. stocks rallied on a string of corporate
takeovers, sending the Dow and the S&P 500 to their biggest
one-day gains in a month.

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