Warning: Hijack ahead.
Empirically speaking, a divided government is better for stock prices than a power monopoly. The reason is simple…perception of legislative risk (i.e., price controls on pharmaceuticals from Democrats would be an obvious example) weighs heavily on the market. A divided government is less likely to do any legislative damage. If people can project earnings comfortably, they are more willing to pay higher prices for a given level of earnings than they are if they have to worry about legislative risk.
A Democratic president is SLIGHTLY better, historically, than a Republican president for stock prices. Throw out the two major anomalies this century on the upside and the downside (The stock market crash under Hoover, and the technology fueled rise under Clinton in his last term) and this picture starts to change. I can probably track down some data on this next week, if someone reminds me. I’m going on vacation first. 
Economically speaking, the President has almost nothing to do with economic cycles or stock prices. If anyone is still laboring under the ILLUSION that a President does control these things in any substantial way, I heartily reccommend “Secrets of the Temple: How the Federal Reserve Runs the Country,” by William Greider, an EXCELLENT and entertaining book on the Volker Fed under Carter and Reagan.
Working on “Maestro” now, just published by Bob Woodward, about the Greenspan Fed, but it’s a little dumbed down, compared to the Greider work.
Now, back to the OP…
I think it goes back to the ideals of rugged individualism. And some of it is Democrat’s own fault. People in rural areas country tend to vote Republican because you still have idiots on the Democratic side claiming rural voters must be unsophisticated rubes…that’s the only way they could possibly have voted for Bush or Reagan or Goldwater or whoever.
Democrats, take note: such arrogance, condescendence and insensitivity is a GREAT way to mobilize rural voters against your favored candidates.
People will flock to the party they feel wants and respects them, and it is clear many democrats don’t respect rural voters anymore. (They seem to have forgotten where Populism got its start. The Democratic party was once the home of the farmer and the rural voter against Wall Street and the big money in the big cities. How times change.)
I also believe that city dwellers and rural dwellers have radically different experiences with taxes. A city dweller pays taxes, but he gets a subway he can ride to work, a bus, a highway nearby he can actually use, because it connects HIS town with others. He gets to go to a park that’s around the corner from his house. He can call the police and they are there in 3 minutes. He gets a sewer system. So he’s getting some tangible benefits he can see every day, in the flesh, for his money.
The rural voter pays the same state and federal taxes, but Highways are miles away. Parks are miles away, and he doesn’t need them anyway, he can get away into the woods, or he can play catch on his own field. If he calls the police, he’s on his own for half an hour. He puts in his own septic tank instead of tapping into the sewer system. If there’s road construction, he sees 9 Tennessee Department of Transportation workers standing around while 2 fill a pothole (and one, always a chick, stands in the road and holds a flag.)
Naturally, one is more tolerant of taxation than the other–the rural voter percieves his taxes as going into thin air.
And since the cops are 30 minutes away from his house, the country gentleman finds it pretty irritating when city folks tell him he shouldn’t be able to own a gun for self defense, because cops will protect him.
Just a few ideas.