Yes, I'm not sure why the AP is reading this in the market's movements the last few days. Given that the Democrats have more or less committed to raising the dividend tax back up to pre-Bush levels if they win, any stock that's got an attractive dividend should be becoming a lot less attractive if the Democrats are poised to win. I would think that would be a more pronounced effect than some vague hope in future gridlock reducing the deficit and hence lowering interest rates.
It's not just the last few days. I've heard this "regulatory gridlock" bunk from the MSM several times in the last few months.