Stocks rise as White House, Democrats trade stimulus offers

Stocks rose Wednesday as House Democrats and the Trump administration traded offers for another round of coronavirus stimulus.

The Dow Jones Industrial Average closed with a gain of 329 points, rising 1.2 percent. The S&P 500 gained 0.8 percent and the Nasdaq composite rose 0.7 percent.

The strong start to Wednesday trading came after Treasury Secretary Steven Mnuchin said that Republicans will propose a $1.5 trillion stimulus bill after he and Speaker Nancy Pelosi (D-Calif.) restarted negotiations last week. House Majority Leader Steny Hoyer (D-Md.) also told House Democrats that he plans to bring a $2.2 trillion offer to the floor Wednesday.

While both parties remain far apart on the preferred size of a stimulus bill, the monetary difference between Democratic and Republican offers has narrowed considerably since the spring.

Democrats and Republicans are attempting to break a months-long stalemate over a follow-up to the Coronavirus Aid, Relief and Economic Security (CARES) Act, the $2.2 trillion stimulus and pandemic response bill signed by President Trump in March. Key elements of that bill, such as a boost to unemployment benefits and emergency loans for small businesses, expired this summer without replacement. 

The House in May passed a roughly $3 trillion bill that Republicans dismissed immediately, and Republicans have been reluctant to approve more than $1 trillion in aid.

The pace of the recovery from the coronavirus recession slowed notably over the summer and into fall, and the U.S. is still reeling from immense economic pain. More than 10 million people who lost their jobs due to the pandemic have not yet found work again, and thousands of small businesses have folded as the spread of the virus hinders the economy from fully reopening.

Updated at 4:42 p.m.