Stocks Rise Friday, Investors Keep Economic Optimism

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Stocks rose Friday as investors continued to have optimism in the economic recovery. 

The S&P 500 rose 0.6%, led by the big tech stocks of the Nasdaq, up 0.65%. The 10-Year Treasury yield has run up in the past week, reflecting higher inflation expectations, but is holding still at 0.78%. Yields rise when prices fall.

One point of optimism: Fiscal stimulus may be on the way. The economy needs it fast, as small businesses need cash since they aren’t fully reopened. House speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin continue to have what seems to be a productive dialogue.

Most sectors rose a few tenths of a percentage point and although big tech is enjoying momentum from higher earnings growth expectations than most other sectors, it is a positive sign that the Vanguard S&P 500 Value ETF  (VOOV) - Get Report is up more than 7% since September 23.

Another incrementally positive guidepost for investors was NXP’s  (NXPI) - Get Report raised guidance for the current quarter to almost $2.3 billion. Analysts say strength in autos was part of the picture, one small sign pointing towards a cyclical upturn in the global economy. NXP rose almost 6% to $142 a share.

Also, the $100 billion by market cap Advanced Micro Devices  (AMD) - Get Report is reportedly in talks to buy $25 billion Xilinx  (XLNX) - Get Report for $30 billion. Xilinx shares rose 17%, while AMD investors were unenthused, with the stock down 3%. 

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