Photo: Eugene Hoshiko, AP
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NEW YORK (AP) — Stocks are rising on Wall Street Friday as talks appear to be continuing in the start-and-stop drive on Capitol Hill to deliver more aid to the ailing economy.
The S&P 500 was 0.6% higher in early trading, on track for its third straight gain. It’s also on pace to close out its best week since July, following a weekslong run of mostly shaky trading amid worries about the inability of Congress to support the economy and concerns that stock prices simply got too high during the summer.
The Dow Jones Industrial Average was up 112 points, or 0.4%, at 28,538, as of 9:45 a.m. Eastern time, and the Nasdaq composite was 0.7% higher.
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. Investors have been clamoring for such 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.
Trump said that House Speaker Nancy Pelosi was negotiating in bad faith when he called off the talks. But within a couple 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 that Democrats say are needed as part of a national strategy to “crush the virus.”
After trading ended on Wall Street Thursday, Pelosi spokesman Drew Hammill said she spoke with Treasury Secretary Steven Mnuchin, and the conversation focused on “whether there is any prospect of an imminent agreement on a comprehensive bill.”
Hammill said that Mnuchin said Trump was indeed interested in such a deal.
This week’s rollercoaster — where the S&P 500 swung at least 1.4% for three straight days— is just the latest bout of volatility for a market that has been notably rocky for weeks.
“When the world’s financial markets are at the mercy of the randomness emanating from the White House, it is hardly surprising that investors elsewhere would prefer to wait on the side-lines,” said Jeffrey Halley of Oanda in a report. “Unfortunately, things are unlikely to settle down over the next few weeks.”
Regardless of whether Washington can strike a deal before the election, some investors are getting more optimistic about the chances for a big support package in 2021. If the Democrats sweep the White House, Senate and House of Representatives, the thinking is that they’ll likely approve stimulus for the economy. That could help offset the higher tax rates and tighter regulations on businesses that investors also expect from a Democratic-controlled Washington. Wall Street is seeing a Democratic sweep as more likely than before.
Still, other challenges remain for the market. Chief among them is the still-spreading coronavirus pandemic, highlighted by Trump’s own COVID-19 diagnosis.
Some areas of the economy are slowing following the expiration of Congress’ last round of aid, stocks still look too expensive in the eyes of some critics and tensions continue to simmer between the United States and China.
The yield on the 10-year Treasury was holding steady at 0.78%.
In European stock markets, the French CAC 40 rose 0.8%, and the German DAX returned 0.1%. The FTSE 100 in London rose 1%.
In Asia, Japan’s Nikkei 225 slipped 0.1%, and Hong Kong’s Hang Seng lost 0.3%. Stocks in Shanghai jumped 1.7% after trading resumed following a weeklong holiday.
AP Business Writer Joe McDonald contributed.
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