House Democrats said they are paring back their proposal for a new stimulus package in an attempt to jump-start negotiations with the Trump administration. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell have said the government’s top priority should be to provide affordable loans to small businesses and further support for millions of Americans still unemployed.
Paralyzing partisanship has prevented a Congressional renewal of aid, and the recent vacancy on the Supreme Court following the death of Justice Ruth Bader Ginsberg deepened the divide. The renewed optimism that the biggest economy might get another boost carried over into Friday's trading.
“This stimulus deal needs to go through," Stephen Innes of AxiCorp said in a commentary. “With the risks building up everywhere you look, it doesn’t seem to be a great time to be trying to pick the bottom of equity markets, but a stimulus relief bill will go a long way to nudging the market along."
Japan's benchmark Nikkei 225 edged up 0.6% to 23,219.41. Australia's S&P/ASS 200 gained 1.3% to 5,954.00, while South Korea's Kospi was up 0.5% at 2,283.47. Hong Kong's Hang Seng gained 0.4% to 23,394.24, and the Shanghai Composite edged less than 0.1% higher to 3,224.84.
On Wall Street, the S&P 500 rose 0.3% to 3,246.59 after swinging between a loss of 0.9% and a gain of 1.3%. The market’s momentum has shifted with lightning speed recently, often changing direction by the hour.
The U.S. presidential election is a big factor, particularly after President Donald Trump’s refusal Wednesday to commit to a peaceful transition of power i f he lost, and rising tensions between the United States and China. Adding to the uncertainty is the question of how soon drugmakers will be able to develop a coronavirus vaccine to stem future waves of outbreaks.
“We’re focused on the strategic and the long-term, rather than the day-to-day, because it’s going to be volatile between now and the election,” said George Rusnak, head of investment strategy at Wells Fargo Private Wealth Management.
The Dow Jones Industrial Average gained 0.2% to 26,815.44. The Nasdaq composite added 0.4% to 10,672.27. The Russell 2000 index of small company stocks inched up less than 0.1%, to 1,451.82. Thursday's headline report showed that 870,000 workers filed for unemployment claims last week, worse than economists had expected.
Layered on top of all the myriad concerns is the still-raging coronavirus pandemic and the threat that worsening counts around the world could lead to more business restrictions. In energy trading, benchmark U.S. crude rose 12 cents to $40.43 a barrel. Brent crude, the international standard, added 10 cents to $42.04 a barrel.
The dollar was trading at 105.48 Japanese yen, virtually unchanged from 105.47 yen Thursday. The euro cost $1.1666, up slightly from $1.1639.
AP Business Writers Stan Choe, Damian J. Troise and Alex Veiga contributed.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama