S&P 500 nears record following stimulus progress

NOW YORK >> The S& P 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-wracked 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 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 mortgagebacked 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, as it keeps the accelerator floored on its support for the economy.

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 financial 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 things.

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 ushered in by the Fed can help goose home prices and stocks on Wall Street, for example, but they can’t replace the paychecks lost by workers whose businesses have shut because of the pandemic.