*

Polls show tight race, Trump leads in betting markets

*

Trump-linked stocks rally

*

Palantir ( PLTR ) soars after results

*

Indexes up: Dow 0.91%, S&P 500 1.04%, Nasdaq 1.28%

(Updated at 2:18 p.m. ET/ 1818 GMT)

By Chuck Mikolajczak

NEW YORK, Nov 5 (Reuters) -

U.S. stocks advanced in a broad rally on Tuesday after data

signaled a solid economy, but investors braced for volatile

trading this week as voting began in an extremely tight U.S.

presidential election.

The Institute for Supply Management said its

non-manufacturing purchasing managers index, a gauge of the

services sector, accelerated to 56.0 last month, its highest

since August 2022, from 54.9 the prior month and above the 53.8

expected by economists polled by Reuters.

The election outcome could take days to be finalized as the

latest polls showed the race between Republican Donald Trump and

Democrat Kamala Harris, which has moved markets in recent

months, was too close to call.

The former president's odds improved on Tuesday in betting

markets that many investors consider as election indicators.

"The market continues to try and price for what is the

outcome of this election," said Rob Haworth, senior investment

strategist at U.S. Bank Wealth Management in Seattle.

"It's been so tight and even if we look at the price

range we've been in, we've been in a tight price range, and so

what's really moving us is marginal positioning for one result

or the other."

"Both the bond market and the equity market are looking

at Congress as important as well," he added. "Most base cases

are for divided government, but this election is so close we

could get any outcome, that's the challenge."

The Dow Jones Industrial Average rose 382.09

points, or 0.91%, to 42,176.69, the S&P 500 gained 59.65

points, or 1.04%, at 5,772.34 and the Nasdaq Composite

advanced 232.84 points, or 1.28%, to 18,412.82.

Volatility was more pronounced in government debt and

currency markets. The benchmark 10-year U.S. Treasury note yield

pared gains after a solid auction lifted it to a

high of 4.366%.

Equity markets avoided the volatility of Monday on

expectations of a soft landing for the economy, bolstered by

corporate earnings, lower interest rates and a resilient labor

market.

Still, the CBOE Volatility Index, also known as Wall

Street's "Fear Gauge," at 20.63 was slightly higher than its

long-term average of 19.46, although it had eased from a

near-two month high hit last week of 23.42.

All 11 S&P 500 sectors climbed, with industrials,

consumer discretionary and tech each up more

than 1%.

Investors are also keeping an eye on Congressional elections

to determine the balance of power in Washington. Many analysts

predict a split government, which would limit the ability of the

president to enact significant policy changes.

Stocks viewed as proxies on a win for the former president

jumped, with Trump Media & Technology Group ( DJT ) surging

more than 10% and prison operator Geo Group ( GEO ) gaining

about 6%.

Crypto stocks tracked bitcoin higher, with the

cryptocurrency up roughly 4%, as Trump has positioned himself as

friendly to the sector.

Palantir ( PLTR ) soared more than 23% to a record high

after the data analytics firm raised its annual revenue forecast

for the third time.

Shares of Boeing ( BA ), which had risen in premarket trade

following the end of a prolonged workers' strike, fell 2.1% in

choppy trade.

The Federal Reserve will announce its latest policy

statement on Thursday. Markets have almost completely priced in

a 25-basis point interest rate cut, but the outlook for the path

of future easing is less certain given the economic strength.

Advancing issues outnumbered decliners by a 3.31-to-1 ratio

on the NYSE and by a 2.41-to-1 ratio on the Nasdaq.

The S&P 500 posted 23 new 52-week highs and seven new lows

while the Nasdaq Composite recorded 92 new highs and 100 new

lows.