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Stocks End Higher on COVID Treatment Hopes

Stocks end higher Friday, boosted by positive data from Merck's COVID treatment trial as investors enter the final, and often most difficult, three months of the year.

Stocks finished the first day of October on a high note Friday, after the worst month for tech stocks since the peak of the pandemic, boosted by positive data linked to Merck's  (MRK) - Get Merck & Co., Inc. (MRK) Report late-stage coronavirus treatment pill.

The Dow Jones Industrial Average, which posted its best October start since 2003, finished up 482 points, or 1.43% to 34,326, while the broader S&P 500, posting its best start to an October since 2007, gained 1.15%, and the tech-heavy Nasdaq advanced 0.82%.

The 10-year Treasury yield slipped to 1.468%. An increase in rates took a bite out of tech stocks at the end of the September.

"This week, stocks stumbled as negotiations on fiscal policy and debt ceiling issues began to increase in Washington D.C.,” said LPL Financial Director of Research Marc Zabicki. “The potential for an overdue asset price correction has left us a bit cautious of late.”

A stronger-than-expected reading for September factory activity, paired against the fastest annual increase in the Fed's preferred inflation gauge -- the PCE Price Index -- added to the market's complexity.

In Washington, House Speaker Nancy Pelosi reportedly said there would be a vote Friday on the $1 trillion infrastructure bill that has divided the Democratic for months. Pelosi ruled against bringing the bill to the floor Thursday night.

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Progressives have threatened voted the bill down unless they get assurances the Senate will pass a larger bill to invest in such areas climate policy, household tax credits and health care expansion.

President Joe Biden was scheduled to attend a meeting on Capitol Hill Friday afternoon to speak with members of the House Democratic Caucus, the White House said.

“I think the President might be the only person that can bridge both the trust gap and the timing gap,” said Representative Dean Phillips, Democrat of Minnesota, according to the New York Times.

Dow component Merck surged after the pharmaceutical company unveiled promising data for a COIVD antiviral treatment it said can cut the risk of hospitalization and death in at-risk patients by as much as 50%, offsetting broader market concerns linked to inflation, China growth and the recent surge in energy prices.

Live Nation Entertainment  (LYV) - Get Live Nation Entertainment, Inc. (LYV) Report, a key re-opening play built on the group's concert and live performance schedule, finished higher on the heels of Merck's antiviral treatment trial. 

Five9  (FIVN) - Get Five9 Inc. Report rose after shareholders rejected a $14.7 billion all-stock takeover bid from Zoom Video Communications  (ZM) - Get Zoom Video Communications (ZM) Report.

Southwest Airlines  (LUV) - Get Southwest Airlines Co. Report took off after JPMorgan analysts upgraded the carrier to overweight from neutral and boosted their price target to $70 from $64.