Stocks close out biggest weekly gain in 3 months
Investors encouraged as pandemic relief talks proceed
Wall Street closed out its best week in three months Friday as investors drew encouragement from ongoing negotiations on Capitol Hill aimed at delivering more aid to the ailing U.S. economy.
The S&P 500 rose 0.9%, its thirdstraight gain. The benchmark index ended the week with a 3.8% gain, its strongest rally since early July. The solid finish follows a weekslong run of mostly shaky trading over worries that Congress and the White House won’t deliver more support for the economy as it reels from the impact of the coronavirus pandemic and concerns that stock prices simply got too high during the summer.
Much of this week’s focus has been on Washington, where President Donald Trump sent markets on a sudden skid Tuesday after he halted negotiations on a support package for the economy until after the election. He appeared to change his mind a few hours later, however.
Andon Friday, Trump was cheerleading the prospect of a deal, declaring on Twitter that talks on a new aid package are “moving along. Go Big!”
“The fact that Trump reversed course, I think, has given people optimism again,” said Randy Frederick, vice president of trading& derivatives at Charles Schwab.
The S&P 500 rose 30.31 points to 3,477.14. The Dow Jones Industrial Average gained 161.39 points, or 0.6%, to 28,586.90. The gain nudged the Dow into positive territory for the year. The Nasdaq composite climbed 158.96 points, or 1.4%, to 11,579.94.
Investors have been clamoring for more federal aid since the expiration of extra benefits for laid-off workers and other stimulus for the economy that Congress approved earlier this year. Economists say the outlook is grim without such support, and the chair of the Federal Reserve has said repeatedly it will likely be necessary.
Still, the prospects for a new deal on more aid have been shaky, especially this week.
Trump said that House Speaker Nancy Pelosi was negotiating in bad faith when hecalled off the talks Tuesday. But within a couple of hours, he appeared to backtrack. He said that he would back more limited programs that would send $1,200 payments to Americans and support the airline industry and small businesses specifically.
Pelosi on Thursday said she was not interested in a standalone measure to help airlines unless it was accompanied by a broader effort that includes COVID testing and other programs Democrats say are needed as part of a national strategy to “crush the virus.”
White House economic adviser Lawrence Kudlow told reporters that “developments are positive” ahead of a telephone conversation between Pelosi and Treasury Secretary Steven Mnuchin. At the same time, Senate Majority Leader Mitch McConnell said he doubts a deal will get done before the election.
Pelosi and Mnuchin spoke on the phone for 30 minutes, but nothing concrete appeared to immediately emerge from the discussion.