Make that two in a row. The S&P 500 rose for a second straight week after suffering four weeks of declines. Investors bought stocks Friday on hopes for more fiscal aid. The indexes have bounced back sharply since Tuesday’s sell-off after President Donald Trump abruptly called off negotiations for a package. He has since done an about-face.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to reach a deal on a relief package Friday, but investors are increasingly betting on a Democratic sweep in the November election that they hope will result in a broad stimulus bill.
On Wall Street, consumer cyclical stocks powered the advance that helped push the S&P 500 up almost 1% Friday. The Dow added a half percent, and the Nasdaq gained 1.4%.
Washington Crossing Advisors senior portfolio manager Chad Morganlander:
“That’s the cyclical bounce that value investors were hoping for. If you can couple that fiscal stimulus - and that’s the reason why they’re moving that direction because of the fiscal stimulus - you couple that with a coronavirus cure, and a year from now, investors could be rewarded handsomely for being in those more cyclical companies.”
Xilinx topped the S&P’s list of gainers with a 14% jump. Advanced Micro Devices is reportedly in talks to buy the chipmaker in a deal valued at more than $30 billion.
And shares of General Electric rose. Goldman Sachs restarted coverage on the industrial conglomerate with a “buy” rating.