By Akane Otani and Riva Gold

-- S&P 500 up 0.4%, Dow industrials up 73 points

-- 10-year Treasury yield rises to 1.867%

U.S. stocks climbed Tuesday, extending a volatile stretch for financial markets at the close of a fractious U.S. presidential campaign.

Stocks fell early in the session but rebounded in the afternoon, in a broad market rally that reversed many of the morning's top trades. U.S. oil prices settled higher and government bonds fell.

In recent days, risky assets such as stocks have risen as Hillary Clinton pulled ahead in polls and sold off as the race tightened. On Monday, the S&P 500 snapped itslongest losing streak in nearly 36 years with a 2.2% gain, its biggest jump since March.

Many investors said they were cautious heading into Tuesday evening, with some citing the selloff in the days immediately after the U.K.'s surprise vote to exit the European Union.

"People had assumed on a flip of a coin that Brexit wouldn't happen," said Matt Lloyd, chief investment strategist at Advisors Asset Management, which oversees about $18.5 billion in assets.

Trading will likely continue to be volatile until the results of the U.S. election are in, analysts said.

(Here are five markets to watch before and after the election.)

"What the market wants to see is that there's a clear winner, that there's no sort of uncertainty surrounding the results," said Quincy Krosby, market strategist at Prudential Financial.

The Dow Jones Industrial Average rose 73 points, or 0.4%, to 18332 after adding more than 140 points earlier in the session. The S&P 500 gained 0.4% and the Nasdaq Composite rose 0.5%.

The Stoxx Europe 600 climbed 0.3% following a muted session in Asia.

As investors bought stocks, U.S. government bonds pulled back. The yield on the 10-year U.S. Treasury note rose to 1.867% from 1.826% on Monday. Bond yields rise when prices fall.

The last round of national polls showed Mrs. Clinton with a steady but narrow lead over Donald Trump, ranging from 3 to 6 percentage points.

"We are more cautious than usual," said Luca Paolini, chief strategist at Pictet Asset Management, noting he had scaled back on stocks, particularly cyclicals, and trimmed some exposure to emerging markets and U.S. high yield ahead of the vote.

Historically, stocks have risen more often than not in the period from election day through the inauguration, according to the WSJ Market Data Group, which looked at the 30 presidential elections since the creation of the Dow Jones Industrial Average. The Dow industrials have risen an average of 4.6% when the same party remained in power, and declined an average of 4% from election day to inauguration day after a party change.

Mr. Paolini said he was prepared to consider adding to his portfolio should investors overreact to the presidential result. Longer term, the market tends to be driven by corporate profits, the economy, and monetary policy, which currently look strong in the U.S. for the next few months, he said.

The cost of protecting against swings in currencies such as the Mexican peso and Japanese yen rose Tuesday, signaling that investors were bracing for volatility when U.S. election results roll in.

The overnight implied volatility on a U.S. dollar-Mexican peso options contract, a gauge of how expensive it is to hedge against overnight swings in the pair, surged to all-time highs Tuesday. The metric was recently at 69.975%,up from 16.075% Monday. For the Japanese yen, many investors' preferred haven, implied volatility jumped to 34.55% from 10.563% Monday, according to Thomson Reuters data.

The dollar rose 0.6% against the yen and fell 0.7% against the peso in intraday trading Tuesday.

U.S. crude oil rose 0.2% to $44.98 a barrel, and gold slipped 0.4% to $1,273.40 an ounce -- reversing course from earlier in the session.

Peter Hug, global trading director at Kitco Metals, was preparing for a volatile and illiquid gold market on election night, canceling plans to work as the results roll in.

"It's a market that is almost impossible to trade," he said. "Between 8 and 10 o'clock, you could have some explosive moves here and its all going to be on sound bites...Based on what I'm seeing today, I just do not want to not be around."

One metal seemed largely unmoved by the election. Copper, which rose 3.1% to $2.3790 a pound, logged its 12thconsecutive session of gains-- its longest winning streak in at least 28 years.

Improved economic data and manufacturing activity from major consumers China and the U.S. have helped copper prices gain in the past two weeks, as investors speculate on a pickup in demand.

--Stephanie Yang and Chelsey Dulaney contributed to this article.

Write to Akane Otani at akane.otani@wsj.com and Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

November 08, 2016 16:25 ET (21:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.