Dow futures up 100 points as stocks head for best week since August

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Stock-index futures rose Friday as investors remained optimistic over prospects for another round of fiscal stimulus, with major benchmarks on track for their best week since August.

What are major benchmarks doing?

Futures on the Dow Jones Industrial Average
rose 112 points, or 0.4%, to 28,422, while S&P 500 futures
were up 14.25 points, or 0.4%, at 3,451.75. Nasdaq-100 futures
advanced 36 points, or 0.3%, to 11,575.

The Dow
on Thursday rose 122.05 points, or 0.4%, to finish at 28,425.51, while the S&P 500
advanced 27.38 points, or 0.8%, to close at 3,446.83. The Nasdaq Composite
finished at 11,420.98, up 56.38 points, or 0.5%.

Through Thursday, the Dow was on track for a 2.7% weekly gain, while the S&P 500 was up 2.9% and the Nasdaq was up 3.1%. That would be the strongest weekly rise for the Dow since Aug. 7 and the strongest for the S&P 500 and Nasdaq since Aug. 28, according to FactSet.

What’s driving the market?

Stocks advanced Thursday despite a lack of progress toward a stimulus package, encouraged by continued talks between House Democrats and the Trump administration.

Stocks had taken a tumble on Tuesday after President Donald Trump announced he had ended talks on a stimulus package until after the election, but a few hours later changed course to call for action on piecemeal stimulus efforts. House Speaker Nancy Pelosi, D-California, on Thursday rejected calls for stand-alone aid for airlines, saying any relief must be part of a broader package.

But talks continued, with Pelosi and Treasury Secretary Steven Mnuchin holding further discussions Thursday afternoon. A Pelosi spokesman tweeted that Mnuchin had signaled the administration was again open to a comprehensive package.

“Investors have clearly been sensitive to the on/off fiscal stimulus talks, as U.S. equities appear primarily driven by expectations surrounding the outcome of these intense discussions,” said Han Tan, market analyst at FXTM, in a note.

“Amid the drama between the White House and Democrats, which add to the political shenanigans leading up to the November presidential elections, it’s evident that investors are clinging on to any sliver of hope that the world’s largest economy will see additional fiscal aid,” he said.

Analysts said Democratic challenger Joe Biden’s widening lead in the polls over President Donald Trump has also been seen as a supportive factor because it lessens, but doesn’t eliminate, the prospect of a contested election outcome on Nov. 3, a prospect that has unnerved investors fearing weeks of legal and political wrangling.

Read: Stocks are rallying because fears of a contested election are fading

The economic calendar is light, with data on August wholesale inventories due at 10 a.m. Eastern.

Which companies are in focus?

  • The Wall Street Journal reported that Advanced Micro Devices Inc. AMD is in talks to buy rival chip maker Xilinx Inc.XLNX, in a deal that could be valued at more than $30 billion and mark the latest big merger in the rapidly consolidating semiconductor industry. AMD shares were down 5% in premarket action, while Xilinx shares rose 17%.

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