U.S. stocks are likely to rally if Republicans pull off a victory in Massachusetts' Senate election on Tuesday, on hopes that it would slow down President Obama's sweeping reform program, especially with respect to healthcare.

The Democrats' big majorities in Congress are considered key to passing President Obama's reform agenda across numerous parts of the economy, including banking and healthcare...

Here are some possible scenarios of market reaction to election results.

* Republican candidate Brown wins, Democrat Coakley loses

Stocks would rise as the victory gives the Republicans 41 seats in the Senate, enough to filibuster President Obama's reform bills, including healthcare. Democrats would lose their 60-vote Senate super-majority that now lets them clear Republican procedural hurdles and pass legislation or confirm presidential nominees without a single Republican vote.

"The hope is (for) a return of gridlock, traditionally very favorable for equity markets," said Carmine Grigoli, chief U.S. investment strategist, equity division, at Mizuho Securities USA in New York.

If Democrats are stripped of such a majority, Obama would be forced to try to find common ground with Republicans, who have opposed most of his agenda, including the landmark bid to revamp the $2.5 trillion U.S. healthcare system.

Goldman Sachs noted healthcare stocks are likely to rally, with managed-care stocks such as Humana Inc (HUM.N) expected to gain the most, followed by pharmaceuticals.

Humana rose 7.1 percent on Tuesday to close at $51.94.

Pharmaceutical companies' shares also advanced, with Merck & Co (MRK.N) and Pfizer Inc (PFE.N) rising as the Dow's top two percentage gainers.

In contrast, hospital stocks such as Community Health Systems Inc (CYH.N) and Tenet Healthcare Corp (THC.N) came under pressure, as they have been viewed as "net winners" under the reform.

The S&P Healthcare Index .GSPA ended up 2.04 percent as last-minute voters rushed to the polls to determine who will replace the late Edward Kennedy in a close race.

Financial stocks would also gain as a Republican victory could slam the brakes on Obama's legislation to tighten regulations of the U.S. financial industry. In Massachusetts, Coakley has demonstrated a position of wanting to regulate the sector.

"Financials will have more resistance to regulations," said Matt Havens, partner at Global Vision Advisors in Hingham, Massachusetts.