Stocks edge higher as Wall Street looks to close wobbly week

Business

NEW YORK (AP) — Stocks edged higher in afternoon trading on Friday, as Wall Street looks to close a wobbly week of trading.

The market remains focused on trillions of dollars of potential government aid that could be coming for the economy, as Democrats move forward with their stimulus package.

The S&P 500 index was up 0.1% as of 1:15 p.m. Eastern. The Dow Jones Industrial Average slipped 45 points, or 0.1%, to 31,386 and the Nasdaq Composite gained 0.1%. The Russell 2000 index of small companies rose 0.1%.

The muted moves follow several days of minor gains and losses for the broader market, but every major index is still on track for a weekly gain ahead of a long weekend. U.S. stock and bond markets are closed Monday for Washington’s Birthday.

Investors are hoping for a new round of U.S. government aid as the economic recovery falters. The latest U.S. government report on jobless claims reaffirmed that employment remains a weak spot in the economy, even as vaccine distribution ramps up in the hopes of eventually ending the pandemic. The University of Michigan survey of consumer sentiment came in well below expectations as well, a sign that consumers are wary to spend in the face of economic uncertainty.

Investors do not expect the market to move substantially higher in the near term until there’s more clarity on the future of government stimulus and the direction of the U.S. economy. Democrats have decided to use a legislative process that does not require Republican support to pass the $1.9 trillion package.

“We’re sort of awaiting catalysts,” said Jeffrey Kleintop, chief global investment strategist at Charles Schwab. “The market is still of the opinion that there will be a vaccine-led, broad economic recovery in the second half of this year.”

A majority of companies have now reported their latest round of earnings and the results have been surprisingly good. Roughly 75% of companies in the S&P 500 have released results, showing overall growth of 2.8%, according to FactSet. That’s a sharp reversal from the 13% contraction analysts had forecast in late September.

Mohawk Industries shares jumped nearly 5.2% after the company posted stronger-than-expected quarterly earnings. Genetic analytics company Illumina jumped 15.5% following its encouraging earnings report.

Bumble shares rose a further 12.6%, extending big first-day gains Thursday on the company’s initial public offering.

Banks made some of the strongest gains as bond yields rose, which allow them to charge more lucrative interest on loans. The yield on the 10-year Treasury rose to 1.19% from 1.16% late Thursday. Wells Fargo gained 2.1%.

Most Asian markets were closed to mark the Lunar New Year and European markets were mostly higher.

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