Stimulus talks, Fed news lift S& P 500 near high
The Standard & Poor’s 500 ticked up to the edge of its record Wednesday after the Federal Reserve pledged to keep buying bonds until the economy makes substantial progress from its virus- racked state.
In a mixed and muted day of trading, the S& P 500 rose 6.55 points, or 0.2%, to 3,701.17. It’s within roughly 1 point of its record set last week. The Dow Jones industrial average slipped 44.77 points, or 0.1%, to 30,154.54, and the Nasdaq composite rose 63.13, or 0.5%, to 12,658.19, setting a record high for the second straight day.
Massive efforts by the Fed have helped underpin the market since the spring, and the central bank said Wednesday that it will buy at least $ 80 billion in Treasurys each month and $ 40 billion in agency mortgage- backed securities until “substantial further progress” has been made. It also said again that it would keep short- term interest rates at their record low of nearly zero.
But investors are more interested in what’s happening across Washington, where Democrats and Republicans in Congress appear to be nearing a deal to deliver another dose of f inancial support for the economy. A deep partisan divide has stymied such a deal for months, but a rush of recent momentum has hopes rising that a compromise could be sealed soon to send direct payments of perhaps $ 600 to most Americans, among other measures.
Economists, investors and even Fed officials have been saying such support is crucial because the Fed’s tools alone can help the economy only so much. The lower interest rates can help goose home prices and stocks, for example, but they can’t replace the paychecks lost by workers whose businesses have closed because of the pandemic.
The stakes are rising by the day for Congress to act. A report released Wednesday morning showed that retail sales sank 1.1% last month. It’s the second straight month of weakness.
Restaurants posted sharp declines in sales, and the numbers may get worse. Governments around the country and world are bringing back varying degrees of restrictions on businesses to slow the spread of the virus. .
If Congress can indeed reach a deal, it could help carry the economy through what’s expected to be a bleak winter, before one or more coronavirus vaccines can help the economy get closer to normal next year.
The yield on the 10- year Treasury rose to 0.92% from 0.91% late Tuesday.
Bitcoin, the world’s largest cryptocurrency, topped $ 20,000 for the first time.