Categories
Business

U.S. Stocks See Further Upside Amid Continued Stimulus Optimism

Following the rally seen in the previous session, stocks saw further upside during trading on Thursday. With the upward move on the day, the major averages reached their best closing levels in over a month.

The major averages all ended the day in positive territory. The Dow rose 122.05 points or 0.4 percent to 28,425.51, the Nasdaq climbed 56.38 points or 0.5 percent to 11,420.98 and the S&P 500 advanced 27.38 points or 0.8 percent to 3,446.83.

The strength on Wall Street reflected continued optimism about a coronavirus stimulus bill following the latest comments from President Donald Trump.

In an interview with Maria Bartiromo on Fox Business, Trump said administration officials and Democrats are “starting to have some very productive talks.”

“We started talking again. And we’re talking about airlines and we’re talking about a bigger deal than airlines,” Trump said. “We’re talking about a deal with $1,200 per person, we’re talking about other things.”

Trump abruptly pulled out of negotiations of a new stimulus earlier this week but now says “we have a really good chance of doing something.”

Meanwhile, House Speaker Nancy Pelosi rejected the idea of passing a stand-alone bill providing aid to airlines without a broader relief package.

Pelosi noted that negotiations continue over a broader bill, saying, “We’re at the table. We want to continue the conversation. We’ve made some progress, we’re exchanging language.”

On the U.S. economic front, the Labor Department released a report showing initial jobless claims came in above estimates in the week ended October 3rd.

The Labor Department said initial jobless claims edged down to 840,000, a decrease of 9,000 from the previous week’s revised level of 849,000.

Economists had expected jobless claims to dip to 820,000 from the 837,000 originally reported for the previous week.

“Failure to pass additional fiscal relief measures will lead to more new claims given the announcement of layoffs by many firms,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics. “It also raises the risk that some individuals will lose benefits altogether at the start of 2021.”

Sector News

Energy stocks saw substantial strength on the day, benefiting from a sharp increase by the price of crude oil. Crude for November delivery jumped $1.24 to $41.19 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index spiked by 5.3 percent, while the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index surged up by 3.6 percent and 3.4 percent, respectively.

Significant strength was also visible among airline stocks, as reflected by the 2.6 percent gain posted by the NYSE Arca Airline Index.

Housing stocks also showed a strong move to the upside on the day, driving the Philadelphia Housing Sector Index up by 2.6 percent.

Networking, computer hardware and stocks also saw notable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index jumped by 1 percent, while Australia’s S&P/ASX 200 Index surged up by 1.1 percent.

The major European markets also moved to the upside on the day. While the German DAX Index advanced by 0.9 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index rose by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries saw modest strength after moving notably lower in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2 basis points to 0.765 percent.

Looking Ahead

Traders are likely to keep an eye on developments in Washington on Friday, looking for clues about the likelihood of a new stimulus bill.

Source: Read Full Article