Stocks up after pandemic aid package signed into law

Stocks began the final week of 2020 moderately higher after President Donald Trump signed a $900 billion economic aid package that helps reduce uncertainty amid the re-imposition of travel and business curbs in response to a new coronavirus variant.

The S&P 500 index was up 1 percent as of 2:50 p.m. Eastern.

The Dow Jones Industrial Average rose 244 points, or 0.8 percent, to 30,442 and the Nasdaq composite was up 1 percent. The gains put the indexes on track to close at all-time highs.

Trump signed the measure, which also includes money for other government functions through September, despite expressing frustration that $600 payments to the public weren’t bigger. His signature helped to clear away uncertainty as reinstated travel and business curbs threaten to weigh on global economic activity.

“By and large, it’s a kind of broad-based optimism, so-far-sogood 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.”

Stocks are getting a seasonal tailwind, too, 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 percent during those seven days.