Stocks post weekly loss as economy’s pain deepens

NEW YORK » Stocks closed lower on Wall Street Friday, posting their first weekly loss after two weeks of solid gains.

The S&P 500 fell 0.7%, with stocks of companies that most need a healthier economy taking some of the sharpest losses.

The declines came as more reports showed how the pandemic is deepening the hole for the economy, even as Washington prepares to throw it another lifeline.

Treasury yields also dipped as reports showed shoppers held back on spending during the holidays and are feeling less confident.

Stocks have run out of steam since the S&P 500 set a record high a week ago amid optimism that COVID-19 vaccines and more stimulus from Washington will bring an economic recovery.

Friday offered the first chance for traders to act after President-elect Joe Biden unveiled details of a $1.9 trillion plan to prop up the economy. He called for $1,400 cash payments for most Americans, the extension of temporary benefits for laid-off workers and a push to get COVID-19 vaccines to more Americans. It certainly fit with investors’ expectation for a big and bold plan, but markets had already rallied powerfully in anticipation of it.

“To some extent, most of this optimism had been priced in, but the huge figures had also invited some contemplation as to whether the necessary bipartisan support will materialize for this huge sum,” Jingyi Pan of IG said in a commentary. “The market appears to be playing it safe,” she said.