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Stock Market News for Oct 12, 2020

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Wall Street closed higher on Friday buoyed by market participants' expectations for a full-phased fresh fiscal stimulus before the upcoming U.S. presidential election. Moreover, positive developments on COVID-19 treatment front also boosted investors' confidence. All the three major stock indexes ended in positive territory. For the week as a whole, these indexes witnessed best week since summer.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.6% or 161.39 points to close at 28,586.90, maintaining 3-day winning streak. Notably, 19 components of the 30-stock index ended in the green while 11 finished in red. The blue-chip index turned green year-to-date for the first time since Sep 2.

Moreover, the tech-laden Nasdaq Composite finished at 11,579.94, surging 1.4% or 158.96 points due to the strong performance by large-cap stocks. The tech-heavy index has gained for two successive days.

Meanwhile, the S&P 500 advanced 0.9% to end at 3,477.13, continuing 3-day winning run. The Energy Select Sector SPDR (XLE) plunged 1.6% while the Technology Select Sector SPDR (XLK) surged 1.5%. Notably, eight out of eleven sectors of the benchmark index closed in positive zone and three in the red.

The fear-gauge CBOE Volatility Index (VIX) was down 5.2% to 25. A total of 8.92 billion shares were traded on Friday, lower than the last 20-session average of 9.76 billion. Advancers outnumbered decliners on the NYSE by a 1.30-to-1 ratio. On Nasdaq, a 1.42-to-1 ratio favored advancing issues.

Possibility of a Fresh Fiscal Stimulus Deal

The Trump administration has raised the size of the fiscal stimulus package to $1.8 trillion from $1.6 trillion proposed earlier. The Democrats, on the other hand, have advocated an aid package of $2.2 trillion. House Speaker Nancy Pelosi and the Treasury Secretary Steven Mnuchin are negotiating to reach a deal on second round of fiscal stimulus before the U.S. presidential election scheduled on Nov 3.

Meanwhile, discrepancies regarding the scope of the aid package are also persisting. The Democrats have demanded at least $436 billion for cash-crunch state and local governments while the White House has denied to allot more than $150 billion.

The Democrats want the unemployment benefit of $600 per week per individual to continue up to January 2021 but the Republicans have offered a supplemental benefit of $400 only. Moreover, the two sides are yet to reach an agreement on tax credit and food aids.

Positive Development on Virus Treatment

Gilead Sciences Inc. (GILD - Free Report) reported that a late-stage study of its experimental COVID-19 treatment drug remdesivir showed it shortened time to recovery. The New England Journal of Medicine has published the result of the study. Shares of Gilead rose 0.8% following the news. Gilead carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Weekly Roundup

Last week was an impressive one for Wall Street. The Dow gained 3.3%, marking its best weekly gain since Aug 7. The S&P 500 advanced 3.8%, reflecting its best weekly performance since Jul 2. The Nasdaq Composite surged 4.6% to finish its best week since Jul 2.

The speed up of negotiations between the Republicans and Democrats for a second round of fiscal stimulus and investors' expectations regarding the fresh stimulus to be injected before the upcoming presidential election resulted in Wall Street rally.

Stocks That Made Headline

Twilio Intends to Buy Customer Data Start-Up Segment

Twilio Inc. (TWLO - Free Report) is planning to acquire cloud-based customer data infrastructure start-up — Segment — for $3.2 billion. (Read More)

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