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Investing.com – The Dow notched its best week since August on Friday, as hopes for further fiscal aid to keep the economy on track were boosted on reports the White House raised its coronavirus stimulus offer to $1.8 trillion, though that is still short of the Democrat’s $2.2 trillion proposal.
The Dow Jones Industrial Average rose 0.57% or 161 points, and had its best week since the week ending Aug. 7. The S&P 500 ended 0.88% higher, while the Nasdaq Composite gained 1.39%, with indexes notching their biggest gains since the week ending July 3.
Treasury Secretary Steven Mnuchin is expected to discuss the new $1.8 trillion proposal with House Speaker Nancy Pelosi when the two speak Friday, The Wall Street Journal reported, citing sources.
Earlier on Friday, Senate Majority Leader Mitch McConnell said another fiscal package was unlikely in the next three weeks, while Trump said he wanted to see a larger relief bill than either side had offered so far. “I’d like to see a bigger stimulus package than either the Republicans or Democrats are offering,” Trump said on Rush Limbaugh radio show. “I’d like to see money going to people.”
Reports the White House is raising its offer comes a day after Pelosi rejected the idea of passing standalone aid bills, preferring instead to roll out a broader relief package that would include support for individuals, small businesses and airlines.
Economists have repeatedly highlighted the importance of fiscal aid to keep the recovery intact, though have recently suggested that possible delays could eventually lead to a larger deal.
“The lack of additional fiscal support will create downside momentum for economic activity in the fourth quarter … but it is not necessarily bad news. More stimulus is coming in early 2021, and the odds are that it will be bigger than would otherwise be the case,” Jefferies (NYSE:JEF) said.
Sectors tied to the progress of the economy advanced. Consumer discretionary was among the gains eBay (NASDAQ:EBAY) and Etsy (NASDAQ:ETSY) easing leading the upside.
Big tech continued to add to gains, led by a more than 2% rise in Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN). Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) rose 1%, while Facebook (NASDAQ:FB) ended marginally higher.
Energy proved an exception to the rally, down more 1%, as oil prices fell 1%, though are set to end the week sharply higher with weather-related supply disruptions easing demand concerns somewhat.
Tech was also pushed higher by a rise in chip stocks after strong gains in NXP Semiconductors NV (NASDAQ:NXPI) and Xilinx (NASDAQ:XLNX), with the latter ending 14% higher on reports that Advanced Micro Devices (NASDAQ:AMD) was in advanced talks to buy the company.
NXP Semiconductors NV (NASDAQ:NXPI) closed up 5% as it lifted quarterly guidance, citing a “material improvement” in demand across all end markets.
In other news, General Electric (NYSE:GE) ended nearly 3% higher after Goldman Sachs said the conglomerate will emerge stronger from the pandemic and reinstated its coverage on the stock with a $10 price target.
