Posted By: Eugene Taylor

By Ellis MnyanduTue Nov 7, 8:18 AM ET

NEW YORK (Reuters) - U.S. stock futures signaled a flat
Wall Street open on Tuesday, with investors wary of making big
bets on stocks as Americans cast ballots 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 1.7 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 17 points,
and Nasdaq 100 futures gained 2.5 points.

Polls begin closing at 6 p.m. (2300 GMT), but it could be
hours before results are known in many crucial races.

Shares of Applied Materials Inc. (Nasdaq:AMAT - news) rose 2.4 percent
to $17.70 in electronic trade after Bank of America raised its
price target on the supplier of microchip-making equipment.

Tax preparer H&R Block Inc. (NYSE:HRB - news) is also in focus after
it cut its profit forecast late on Monday and announced it was
mulling a sale of its mortgage unit. The stock slipped 8 cents
before the bell from a $21.89 close.

In other news, the Wall Street Journal reported that
Verizon Communications Inc. (NYSE:VZ - news), 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.

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. The stock fell 2.8 percent to $27.26 in
electronic trading on Tuesday.

U.S. crude oil for December edged higher to $60.04 a
barrel after Saudi Arabia held out the prospect of deeper
output cuts.

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