Street likes Bush.

THE stock market's fortune appears to be rising with that of President Bush.

At minimum, the collective entity known as the stock market views Bush as a better alternative than Democratic challenger John Kerry. The Bush contract on Intrade.com, an online trading exchange for political, financial and current events, rose to 61.2 last week from an all-time low of 49 on Aug. 12. (The contract expires at 100 if Bush wins.)

The rise in Bush's election prospects in the eyes of online bettors matches his post-convention bounce in the opinion polls. Maybe it's pure coincidence, but the Standard & Poor's 500 Index posted its lowest close for the year of 1063.23 on Aug. 12. Since then, the index has quietly erased all its losses to stand unchanged year-to-date.

The Nasdaq Composite Index has pared almost half its yearly loss since Aug. 12, the low close for the technology-heavy index.

What is it about Bush that sits better with equity investors?

Neither the president nor his opponent has been particularly forthcoming with details of his agenda for the next four years. Both have painted broadly. Kerry has said he'll create 10 million jobs in the next four years by closing tax loopholes that encourage outsourcing, reducing the corporate tax rate, subsidizing health care and implementing a new jobs tax credit.

In his acceptance speech, Bush outlined his second-term agenda, including simplification of the tax code and a program for worker education and retraining. He reiterated his desire to make the first-term tax cuts permanent.

Tax reform is an appealing concept. Americans spend about $200 billion a year complying with the tax code--money that could be put to more productive uses. It's also a tough sell. Real reform--a flatter tax with fewer deductions--has to contend with powerful vested interests.

Kerry has said he would repeal the tax cut for households earning over $200,000 a year. That includes the cuts on marginal tax rates as well as on dividends and capital gains. The stock market "has an underlying bias toward Bush because of (Kerry's) rolling back of the tax cuts, its impact on capital gains and dividends and the economic and financial market feedback," said Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc.

There's also a bit of the "better-with-the-devil-you-know attitude toward Bush," said Levkovich.

Because Congress has to enact the president's program, it would take a dramatic shake-up in the makeup of the Republican-controlled Congress to make Kerry's agenda the law of the land.

Regulation, on the other hand, rests with the executive branch. Regulatory policy has implications primarily for specific industry groups, which is something investors will start to focus on when the likely winner becomes clearer closer to the election.

One other thing: Elections used to start and end on the same day, which for the stock market meant the end of electoral uncertainty. The 2000 presidential election changed all that, with its hanging chads and legal challenges.

For the first time in a presidential election, U.S. citizens in every state will be able to cast "provisional ballots" if they believe they're eligible to vote but for some reason their names aren't on the voter rolls.

Vote first, validate later. Consider the possibilities.

--Caroline Baum, Bloomberg News