Bad news for the Dems, the economy seems to be shaping up nicely in time for next year's presidential election:

U.S. stocks rose, pushing the Standard & Poor's 500 Index to the highest since June 2002, amid optimism that some companies will lift profit forecasts when they report third-quarter earnings. Financial shares such as Citigroup Inc. and Merrill Lynch & Co. led the advance.

More than 100 members of the S&P 500 will release results this week. The companies in the benchmark boosted earnings by 16 percent in the third quarter, according to the average estimate polled by Thomson Financial. Profit growth may swell to 22 percent in the fourth period and total 17 percent for the year, Thomson said.

Companies ``are beating numbers with pretty mediocre business conditions,'' said Wayne Wilbanks, who manages more than $1 billion for Wilbanks, Smith & Thomas Asset Management in Norfolk, Virginia. ``You can imagine what will happen when revenue picks up.''

Paul Krugman must be tying that noose as we speak.