U.S. Stocks Climb to Start New Quarter
October 01 2020 - 10:40AM
Dow Jones News
By Caitlin Ostroff
U.S. stocks continued their march higher Thursday, following the
S&P 500's best six-month performance since 2009, as central
banks' stimulus measures keep markets buoyant.
The S&P 500 gained 0.6%. Despite a decline in September, the
benchmark is up more than 35% over the past six months. The Dow
Jones Industrial Average rose 0.4%. The Nasdaq Composite increased
1%.
Appetite for risky assets that typically generate higher returns
-- including stocks -- continue to be buoyed by the flood of cheap
money unleashed by central banks and governments.
"If you look at the market, it's telling you that we're going to
get a recovery next year. I'm convinced we're in a new bull
market," said Patrick Spencer, managing director at U.S. investment
firm Baird. "Even with the election, behind all that is central
banks and liquidity."
Shares of Boeing rose 4% after the plane maker got a tentative
personal endorsement for fixes to its beleaguered 737 MAX from the
head of the Federal Aviation Administration. Shares in PepsiCo fell
slightly even after the drinks and snacks company beat earnings
estimates.
Coronavirus infections are another point of focus. Infection
rates in the U.S. have remained elevated for some months, and
health experts have warned that the colder months may bring a new
wave of cases. Although investors don't expect to see a repeat of
the spring's stringent lockdowns, fresh restrictions could threaten
recovery in the labor market and weigh on consumer spending, which
accounts for more than two-thirds of the U.S. economy.
About 837,000 Americans applied for new unemployment benefits
through the week ended Sept. 26, down from 873,000 the week before,
signaling an improving labor market though unemployment remains
high. New figures from the Department of Commerce showed that U.S.
consumers boosted spending by 1% in August from the month
prior.
U.S. consumer spending rose 1% in August while incomes fell, in
part in part because of a decline in government aid for unemployed
workers.
Investors continue to assess whether Congress will pass another
aid package that would bolster U.S. economic growth ahead of the
elections, though such hopes have largely receded in recent
weeks.
A renewed burst of optimism this week -- prompted by talks
between Republican and Democratic leaders -- began to fade
Wednesday after the House postponed a vote on a $2.2 trillion
package. Democrats are trying to find common ground with the White
House on a bipartisan agreement, though they remain far apart on
key issues.
"The big wild card in the U.S. is whether we get more fiscal
spending or not," said Gregory Perdon, co-chief investment officer
at private bank Arbuthnot Latham. "The political backdrop is just
so toxic."
In bond markets, the yield on the benchmark 10-year Treasury
ticked up to 0.718%, from 0.677% Wednesday.
Overseas, the pan-continental Stoxx Europe 600 rose 0.3%. In
Asia, the Tokyo Stock Exchange halted all stock trading for
Thursday due to a system problem and said it expects to resume
normal trading Friday. Markets in China, Hong Kong and South Korea
were closed for a holiday.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
October 01, 2020 10:25 ET (14:25 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.