Major U.S. stock indexes closed mostly higher Friday, capping off another week of sharp gains, despite Washington’s failure to produce a last-minute coronavirus aid package before Congress takes a summer recess, leaving America’s economic recovery hanging in the balance.
Rising tensions between Beijing and Washington also were in focus, after the Trump administration ordered a ban on transactions with a pair of China-based technology companies.
How did equity benchmarks trade?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.38% closed 46.50 points, or 0.2%, higher at 27,433.48, after flipping positive in the final hour of trade. The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.81% eked out a gain of 2.12 points, or 0.1%, to close at 3,351.28. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.53% retreated 97.09 points, or 0.9%, ending at 11,010.98, after trading down more than 1.5%.
The Russell 2000 Index /zigman2/quotes/210598147/delayed RUT +1.32% of small-capitalization stocks outperformed, adding 24.56 points, or 1.6%, ending at 1,569.18.
What drove the market
U.S. stocks rallied in the last minutes of trade Friday, despite Washington’s failure to come up with a deal on a fiscal stimulus package before Congress breaks for summer recess.
While investors remain hopeful that America’s economy eventually will receive another shot in the arm in the form of government spending, they also worry that last month’s job gains, reported by the Labor Department on Friday, might cause Congress to drag its feet.
The U.S. added 1.76 million jobs in July — just one-third of the unexpected 4.8 million gain last month — with the unemployment rate falling to 10.2% from 11.1% in June. Consensus estimates from economists polled by MarketWatch had been for an increase of 1.7 million jobs on the month.
“The biggest impact of the July employment numbers are political,” Steven Blitz, chief U.S. economist at TS Lombard, wrote following Friday’s employment report. “As a sense of emergency diminishes, so too the rush to push the package across the finish line.”
While the jobs report was better than expected, many U.S. states remain in a battle with rising coronavirus infection rates, while millions of workers still rely on unemployment benefits to stay afloat in a crippled economy.
“The economy is still on life support,” James Knightley, ING’s chief international economist told MarketWatch. “If this drags on,” he said of pandemic aid talks, “I think we’re in a more challenging period for economic growth.”
House Speaker Nancy Pelosi and Democratic leaders met Friday afternoon with White House negotiators for more than a hour in a last-ditch effort to produce an estimated trillion dollar-plus coronavirus aid package before talks collapsed.
As of Friday, the global tally for confirmed cases of COVID-19 climbed above 19 million, according to data aggregated by Johns Hopkins University , and the death toll rose to 715,163. The U.S. case tally climbed to 4.9 million and the death toll rose above 160,000, after the U.S. added another 1,000 deaths overnight and counted another 57,000 new cases.