Dow, S&P squeak out gains as stimulus talks collapse

Two major U.S. stock indexes closed with meager gains Friday amid the collapse of bipartisan stimulus talks and a July jobs report that showed a notable slowdown in the recovery from the coronavirus recession.

The Dow Jones Industrial Average closed with a gain of roughly 0.2 percent Friday and the S&P 500 closed with a gain of less than 0.1 percent. The Nasdaq composite dropped roughly 0.9 percent after setting a record high Thursday.

Wall Street’s mixed Friday results come amid an increasingly uncertain outlook for the U.S. economy and how the federal government plans to replace crucial fiscal stimulus that expired at the end of July.

The July jobs report released Friday showed the U.S. gaining 1.8 million jobs last month, beating expectations. 

Yet while the gains were solid, they were smaller than in May and June and were interpreted widely as a sign that the pace of the recovery has slowed.

Economists had widely expected the pace of the labor market recovery to slow in July amid surging coronavirus cases across much of the U.S. that dampened consumer activity and forced some state and local governments to reimpose restrictions lifted in spring.

Bipartisan negotiations over another round of economic rescue also collapsed Friday after the Trump administration and Democratic congressional leaders failed to bridge substantial differences over enhanced unemployment benefits and aid to state and local governments.

Top Trump administration officials said Friday they will recommend President Trump issue executive orders to extend a boost to jobless benefits in some form, a ban on evictions and foreclosures, and provisions relaxing rules on student loan payments in lieu of a bipartisan deal.