US STOCKS-S&P 500 set for second straight weekly gain on stimulus hopes

US STOCKS-S&P 500 set for second straight weekly gain on stimulus hopes

By Devik Jain

Oct 9 (Reuters)Wall Street’s main indexes were set to rise on Friday, setting up the S&P 500 and the Dow for their second straight weekly gain on hopes of more fiscal aid and growing expectations of a Democratic victory in next month’s presidential election.

After stalling talks on a comprehensive aid package earlier this week, U.S. President Donald Trump on Thursday called for a “skinny” relief bill that would include elements such as direct payments and a bailout to the struggling airline sector.

Shares of JetBlue Airways Corp JBLU.O, Delta Air Lines Inc DAL.N, American Airlines Group Inc AAL.O and United Airlines Holdings Inc UAL.O edged higher in premarket trading.

“The market is continuing to rise on hopes of some sort of a conclusion (on stimulus), not only to the airlines, but to the rest of the country,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

At 8:46 a.m. ET, Dow e-minis 1YMcv1were up 121 points, or 0.43%, S&P 500 e-minis EScv1were up 16.75 points, or 0.49%, and Nasdaq 100 e-minis NQcv1were up 59 points, or 0.51%.

Recent trading on Wall Street has been dictated by negotiations in Washington on more fiscal aid, with stocks falling sharply on Tuesday after Trump broke off talks with Democrats.

The three main stock indexes have since recovered, with investors beginning to digest the possibility of Biden winning the Nov. 3 election after a fractious debate last month led to a jump in his lead over Trump in several national polls.

“Some of the market sectors that would be thought of as performing better under a Biden administration have started pricing in a higher probability of a Biden victory,” said Dan Eye, head of asset allocation and equity at Fort Pitt Capital Group in Harrisburg, Pennsylvania.

Gains of about 10% have put the S&P small-cap .SPCY and mid-cap .IDX indexes on course for their best two-week run since June, outperforming a 4.5% increase in the benchmark S&P 500 over the same period.

In company news, Xilinx Inc XLNX.O surged 17.4% after a report said Advanced Micro Devices Inc AMD.O was in talks to buy the chipmaker in a deal that could be valued at more than $30 billion. Shares of AMD fell 2.6%.

General Electric Co GE.N jumped 6.0% as a report said Goldman Sachs reinstated coverage on the U.S. industrial conglomerate with a “buy” rating, saying the company will emerge stronger from the COVID-19 pandemic.

Gilead Sciences Inc GILD.O rose 2.2% after final data from the drugmaker’s antiviral drug remdesivir showed the treatment cut COVID-19 recovery time by five days.

Attention from next week will also be on Corporate America’s third-quarter earnings season, kicked off by JPMorgan Chase & Co JPM.N, Citigroup Inc C.N and drugmaker Johnson and Johnson JNJ.N.

Analysts expect earnings at S&P 500 firms to have dropped about 21% in the quarter, according to IBES data from Refinitiv.

(Reporting by Devik Jain and Sagarika Jaisinghani in Bengaluru; Editing by Maju Samuel)

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