The S&P 500 has advanced as further clarity regarding the timeline for the development of a coronavirus vaccine and much better than expected retail sales data brought buyers back to the market.
The Dow also joined the S&P in positive territory, both indexes snapping a three-day losing streak driven by halted vaccine trials and continued wrangling in Washington DC over a new pandemic relief package.
But the Nasdaq ended the session slightly lower.
Even so, they all posted gains on the week.
Pfizer Inc announced it could apply for US authorisation for the COVID-19 vaccine it is developing with German partner BioNTech in November.
“The two highest-level market movers are the vaccine timeline and stimulus optimism,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.
“Sometimes the market gets a reality check that even if we get a vaccine early next year that’s an incredibly aggressive and optimistic timeline.”
Retail sales in September blew past analyst expectations and consumer sentiment for the current month surprised to the upside, according to two separate economic reports.
But with previous stimulus having run its course, the outlook is uncertain unless politicians in Washington DC can reach an agreement on a fresh round of fiscal aid.
“It’s important from the retail sales data to see that the consumer is not just limping along but exceeding expectations,” Mayfield added.
“I don’t know how long this can continue without stimulus but it’s heartening to see the consumer has held up pretty well despite some dire expectations.”
On the stimulus front, US Treasury Secretary Steven Mnuchin told House Speaker Nancy Pelosi that President Donald Trump would “weigh in” with Senate Majority Leader Mitch McConnell if an agreement is reached on a new pandemic relief package.
House Republican leader Kevin McCarthy, however, said he does not expect an agreement to be reached ahead of the November 3 election as long as Pelosi is involved.
The Dow Jones Industrial Average rose 110.01 points, or 0.39 per cent, to 28,604.21, the S&P 500 gained 0.58 points, or 0.02 per cent, to 3,483.92 and the Nasdaq Composite dropped 42.32 points, or 0.36 per cent, to 11,671.56.
Third-quarter reporting season burst from the starting gate this week, with 49 of the companies in the S&P 500 having reported.
Of those, 86 per cent have cleared the low bar set by expectations, according to Refinitiv.
Analysts now expect S&P 500 earnings for the July to September period to drop, in aggregate, by 18.7 per cent year-on-year, an improvement from the 21.4 per cent plunge estimated at the beginning of the month, per Refinitiv.
Schlumberger NV’s shares dipped after posting its third straight quarterly loss due to falling crude prices and plunging demand.
Railway operator Kansas City Southern and transportation and logistics company JB Hunt Transport Services Inc fell after the companies’ quarterly results were hit dropping shipping demand.
The Dow Jones Transport index, considered a barometer of economic health, also lost ground.
Shares of fitness company Peloton Interactive Inc slipped after announcing a recall of faulty pedals on its popular exercise bikes.