Stocks rise after Trump signs aid package

Stocks began the final week of 2020 with more gains Monday, nudging the major U.S. indexes to record highs.

The S&P 500 climbed 0.9%, powered by gains in technology, communication services and consumer discretionary stocks. Companies that were hit the hardest by the pandemic, including restaurants, airlines and cruise operators, were among the biggest gainers. Treasury yields were mixed.

The broad rally came as investors welcomed the decision by President Donald Trump to sign a $900 billion coronavirus economic aid package. The package includes $1.4 trillion to fund government agencies, averting a federal shutdown that otherwise would have started Tuesday.

The latest gains add to what has been a record-shattering run for the stock market in recent weeks amid cautious optimism that coronavirus vaccinations will pave the way in coming months for the economy to escape from the grip of the pandemic.

“By and large, it’s a kind of broad-based optimism, so-far-so-good on the vaccine rollout, and the stimulus bill to bridge the gap,” said Ross Mayfield, investment strategist at Baird, “It’s really just a continuation of the broader strength that we’ve seen over the last couple of months.”

The S&P 500 index rose 32.30 points to 3,735.36. The Dow Jones Industrial

Average gained 204.10 points, or 0.7%, to 30,403.97, a record. The Nasdaq composite climbed 94.69 points, or 0.7%, to 12,899.42, also a record. The Russell 2000 index of smaller companies fell 7.70 points, or 0.4%, to 1,996.25.

Stocks also got a seasonal boost, Mayfield said. The market tends to climb in the final five days of trading in December and the first two trading days in January, a phenomenon known as the “Santa Claus rally.” Since 1950, the S&P 500 index has risen an average of 1.3% during those seven days.

Trading is expected to be light this week, as most fund managers and investors have closed their books for the year. It will be another holiday-shortened week, with New Year’s Day on Friday.