U.S. markets changed course abruptly Tuesday finishing in the red amid speculation about the election outcome, while a last-minute rally pushed Canadian markets into the black.

At close, the S&P/TSX was up 12.71 points or 0.14% to 8870.94, while the TSX Venture Exchange slipped 9.41 points or 0.59% to 1598.24. The Dow Jones and S&P 500 had been higher for most of the session, heading for a sixth straight day of gains, but turned south sharply just after 2:30 p.m. ET on the exit poll rumours. The Dow closed down 18.66 points or 0.19% to 10035.73, while the Nasdaq was up 4.92 points or 0.25% at 1984.79, and the S&P was almost unchanged, up 0.07 of a point to 1130.58.

The Canadian dollar was at US81.6¢ late in the day, down 0.20 of a cent.

In Toronto, financial and technology stocks saved the day for the TSX, which had been in positive territory for much of the day but took a sharp dive late in the afternoon before rallying in the final 20 minutes. Financial stocks were up 0.81%, while techs jumped 1.38%. Royal Bank of Canada was one of the few major financial institutions not to move up – it lost 0.05% on the day. Among techs, Research in Motion was up 1% and Nortel Networks jumped 2.89%.

Gold stocks took it on the chin as the price of gold fell sharply. The TSX gold group was down 2.28% as the price of bullion faded $7.20 to US$419.70 an ounce in New York.

Energy issues were down 0.89% as the price of oil continued to drift lower. Crude oil for December delivery on the New York Mercantile Exchange slipped 1¢ to US$50.12 a barrel after going as low as US$49.56 on rising U.S. crude oil inventories and production, along with signs of slowing economic growth.

In New York, election speculation was rampant, pushing the market higher then suddenly lower as Internet reports filtered out about who was ahead. Turnout was unusually high as Americans voted to decide whether Republican incumbent George W. Bush or John Kerry, his Democrat rival, would be the next U.S. president.

The Dow lost about 60 points in 18 minutes. Traders said that part of the slide was due to Internet blogs indicating that Kerry was ahead in key swing states.

Investors traded stocks based on who they thought would win. For example, the S&P aerospace and defense fell 1.5%, led lower by General Dynamics Corp. A Kerry victory could affect defense and health care stocks, said one analyst. General Dynamics Corp. fell 2%; the company was seen as a Bush stock since it makes hardware like military vehicles and ships. It was the biggest percentage decliner in the S&P defense index.

But most analysts agreed the markets don’t really care who wins the election — as long as there is a clear victor Wednesday morning. “Wall Street is quite happy with either, I would think,” one trader said.