Markets see Election Day comeback

Investors staged the largest Election Day stock market rally in 24 years, shaking off the steady stream of poor economic news and continuing fallout from the financial crisis.

{mosads}As voters headed to the polls with a weak economy on their minds, the Standard & Poor’s 500 Index gained more than 4 percent and the Dow Jones Industrial Average increased 305 points, or 3.3 percent.

Bloomberg reported that the gains were the largest since Ronald Reagan defeated Walter Mondale in a landslide in 1984. Both indices have rallied in the last week after steep declines in October. Financial services and credit card companies posted significant percentage gains on Tuesday.

Still, the stock market increases come amid a torrent of sour news about the economy that either Democrat Barack Obama or Republican John McCain is about to inherit.

The nation’s gross domestic product contracted 0.3 percent in the third quarter, the worst result in  seven years. On Monday, the Institute for Supply Management said that its index of manufacturing activity slid to a 26-year low. And the Commerce Department said Tuesday that orders for manufactured goods slipped in September, posting worse numbers than predicted.

The stock market increases also come as the federal government has intervened into financial markets to support banks and credit markets and is reportedly considering a broader array of financial institutions to help.