US STOCKS-Wall St rallies on close Massachusetts race

                                

                                
 * Healthcare shares climb on US Senate cliffhanger
                                
 * Kraft seals $19.6 billion deal to buy Cadbury
                                
 * Dow up 1.01 pct; S&P 500 up 1.1 pct; Nasdaq up 1.3 pct
                                
 * For up-to-the-minute market news, click [STXNEWS/US]
 (Updates to late afternoon, changes byline)
                                
 By Ellis Mnyandu
                                
 NEW YORK, Jan 19 (Reuters) - U.S. stocks rose broadly on
Tuesday as investors scooped up healthcare shares on bets that
a potential Republican victory in Massachusetts' Senate race
could stall U.S. President Barack Obama's reforms and remove a
threat to profits in the sector.
                                
 The S&P Healthcare Index <.GSPA> climbed nearly 2 percent,
including drug company Eli Lilly <LLY.N>, which rose 5
percent.
                                
 Massachusetts voters were deciding a tight race on Tuesday
to replace the late Edward Kennedy, a Democrat. The loss of one
seat in the Senate could hurt the Democrats' ability to proceed
to a vote on the planned healthcare overhaul that seemed to be
in the final stages of the legislative process. For details,
see [ID:nN18159712]
                                
 "The action in Massachusetts is a revolt on tax and spend,"
said Bruce Zaro, chief technical strategist at Delta Global
Advisors in Boston said. "It's a potential for gridlock much
like we had in the Clinton years. I think there's certainly a
desire to return to a more balanced political landscape."
                                
 The Dow Jones industrial average <.DJI> shot up 106.71
points, or 1.01 percent, at 10,716.36. The Standard & Poor's
500 Index <.SPX> gained 12.16 points, or 1.07 percent, at
1,148.19. The Nasdaq Composite Index <.IXIC> rose 29.80 points,
or 1.30 percent, at 2,317.79.
                                
 Health insurers Humana Inc <HUM.N> rose 3.6 percent to
$50.30 and Aetna Inc <AET.N> gained nearly 4 percent to $32.59.
Merck & Co <MRK.N>, a Dow component, gained 2.6 percent to
$40.50.
                                
 All 10 S&P 500 industry sectors traded in positive
territory, and strong momentum could carry the Dow and the S&P
500 to fresh 15-month closing highs.
                                
 The Dow also received a boost from McDonald's Corp <MCD.N>
after Credit Suisse upgraded the fast food giant, saying its
international businesses were a potential driver of earnings.
                                
 McDonald's stock gained 2.3 percent to $63.74 and was the
Dow's second top percentage gainer behind 3M Co <MMM.N>, up 2
percent to $84.94. [ID:nSGE60I0I0]
                                
 Citigroup Inc <C.N> was up 3 percent at $3.53 after it
reported a fourth-quarter loss that narrowed from the previous
year. The loss came on charges linked to repaying government
funds, following JPMorgan Chase & Co's <JPM.N> disappointing
results on Friday. [ID:nN19205676]
                                
 Kraft Foods Inc <KFT.N> was the biggest drag on the Dow,
falling 1.1 percent to $29.25 after it agreed to a revised
cash-and-stock deal to buy Cadbury <CBRY.L> for about $19.6
billion. [ID:nL9294700]
                                
 In other acquisition news, Tyco International <TYC.N>
agreed to buy Broadview Security, which operates as Brink's
Home Security Holdings Inc <CFL.N>, for $1.9 billion. Brink's
shares surged almost 31.6 percent to $41.36. [ID:nN18142358]
                                
 Shares of large-cap technology companies, including Apple
Inc <AAPL.O>, boosted the Nasdaq before quarterly earnings from
International Business Machines Corp <IBM.N>. The tech
bellwether is expected to report results after the close.
                                
 Apple was up 4.2 percent at $214.51 on Nasdaq, while IBM
climbed 1.02 percent to $133.12 on the New York Stock
Exchange.
                                
 The PHLX Semiconductor Index <.SOXX> advanced 1.7 percent.
                                
 Parker Hannifin Corp <PH.N> jumped 4.9 percent to $61.45
after the maker of motion control technology reported a
smaller-than-expected drop in quarterly profit and raised its
full-year earnings forecast. [ID:nN19202957]
 (Editing by Kenneth Barry)