Stocks close best week in three months

Wall Street closed out its best week in three months Friday as investors drew encouragement from ongoing negotiations on Capitol Hill aimed at delivering more aid to the ailing U.S. economy.

The S&P 500 rose 0.9%, its third straight gain. The benchmark index ended theweek with a 3.8% gain, its strongest rally since early July.

Much of this week’s focus has been on Washington, where President Donald Trump sent markets on a sudden skid Tuesday after he halted negotiations on a support package for the economy until after the election. He appeared to change his mind a few hours later, however. On Friday, Trump was cheerleading the prospect of a deal.

“The fact that Trump reversed course, I think, has given people optimism again,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab.

The market’s solid finish follows a weekslong run of mostly shaky trading over worries that Congress and the White House won’t deliver more support for the economy as it reels from the impact of the pandemic and concerns that stock prices simply got too high during the summer.

The S&P 500 rose 30.31 points to 3,477.14. The Dow Jones Industrial Average gained 161.39 points, nudging it into positive territory for the year. The Nasdaq composite climbed 1.4%.

Investors have been clamoring for more federal aid since the expiration of extra benefits for laid-off workers and other stimulus for the economy that Congress approved earlier this year. Economists say the outlook is grim without such support, and the chair of the Federal Reserve has said repeatedly it will likely be necessary.

Frederick said the uncertainty over another stimulus package remains a “substantial risk” to the market.

“When the world’s financial markets are at the mercy of the randomness emanating from the White House, it is hardly surprising that investors elsewhere would prefer to wait on the sidelines,” said Jeffrey Halley of Oanda in a report. “Unfortunately, things are unlikely to settle down over the next few weeks.”