The stock market has been setting records for some time now, and Friday morning, it looked like Wall Street would go into the weekend on a celebratory note. Even with surging COVID-19 case numbers, market participants will not be deterred from their optimism about the long-term potential of the U.S. economy to overcome the current challenges. Moreover, weak employment numbers from November spurred many to believe that the federal government would have to step in with further stimulus efforts to keep economic growth alive. As of 11:15 a.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) climbed 16 points to 30,131, which would be a record close if the Dow finishes there. The S&P 500 (SNPINDEX:^GSPC) pushed further into record territory, rising 22 points to 3,689, and the Nasdaq Composite (NASDAQINDEX:^IXIC) added 45 points to 12,422.

As nice as the gains for the overall market are, they pale in comparison to the huge rises that special purpose acquisition companies (SPACs) have seen. In particular, Star Peak Energy Transition (NYSE:STPK) and CIIG Merger (NASDAQ:CIIC) were both up sharply on Friday morning, and investors have never been more excited about the prospects for shell companies finding strong privately held companies to target for acquisition.

Wall Street sign in front of the New York Stock Exchange

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Star Peak to hook up with a clean energy company

The gains for Star Peak came as a result of the SPAC having identified a merger candidate. Investors will get their shot at privately held Stem.

Stem is a leading player in the rising smart energy space. The company's energy storage devices allow users to cut their energy costs by keeping power in battery storage for use at times of peak demand on electrical grids, with its Athena artificial intelligence-driven software platform playing a key role in optimizing the use of renewable energy generation capabilities. Stem boasts itself as the first publicly traded smart energy storage company.

With the deal, the $383 million that Star Peak investors put up will combine with private equity investments to give Stem a market cap of roughly $1.35 billion. The companies expect the deal to close in the first quarter of 2021. With potential to disrupt the entire electrical grid system, Stem's potential is ringing true with Star Peak shareholders.

CIIG Merger has arrived

CIIG Merger jumped another 30%, with investors continuing to react favorably to its already-announced pending combination with British electric vehicle (EV) company Arrival. The SPAC is getting a lot of attention from investors focused on the EV space.

The latest comments came from CNBC's Jim Cramer, who said that a stock price below $17.50 per share would be a great time to buy shares of the SPAC. Investors responded by sending the share price above $28.

Arrival's small-footprint factories placed locally in multiple markets are a departure from the usual centrally planned, highly capital-intensive manufacturing strategies for automakers. It'll be interesting to see how much of a competitive advantage this proves to be for Arrival, but SPAC shareholders bet it'll be a game changer for EV stocks.

A hot SPAC market reflects stock market strength

Special purpose acquisition companies do best when there are many promising companies wanting to go public. So far, SPACs have been able to find privately held businesses with plenty of potential for growth. That could change in the future, but for now, many investors are watching the SPAC arena closely for tomorrow's leaders.