Dow Industrials Edge Higher as Unemployment Claims Drop
December 03 2020 - 5:21PM
Dow Jones News
By Anna Hirtenstein and Gunjan Banerji
The Dow Jones Industrial Average edged higher Thursday as weekly
jobless claims declined and investors looked ahead to Friday's
monthly jobs report.
The blue-chip index rose 85.73 points, or 0.3% to 29969.52. The
Nasdaq Composite climbed 27.82 points, or 0.2% to 12377.18, setting
another record.
The S&P 500 rose for much of the day before edging lower
ahead of the closing bell, snapping a two-session streak of gains.
The broad stock-market gauge closed down 2.29 points, or 0.1%, to
3666.72.
Major U.S. stock indexes have repeatedly eked out fresh records
on the back of investors' optimism that Covid-19 vaccines will
accelerate the economic rebound next year. But rich valuations for
stocks and elevated infection levels are tempering some of that
cheer, leading to more subdued moves in recent days.
Weekly jobless claims, seen as a proxy for layoffs, dropped to
712,000 for the week ended Nov. 28. That was lower than economists
had expected, reflecting a moderate improvement in the pace of
recovery of the labor market. The monthly jobs report will be
released Friday.
Meanwhile, activity in the U.S. services sector expanded for the
sixth straight month in November, a sign that activity held up
despite the rise in Covid-19 cases, IHS Markit data showed
Thursday.
"Markets have been driving higher, seeing 2021 as the year
economies will snap back," said Peter Dixon, an economist at
Commerzbank. "There is concern a lot of the good news is already
priced in, so I don't expect markets to go shooting into the
stratosphere any time soon, but we could see a general grind
higher."
Shares of airlines, cruise operators and small companies --
sectors that have benefited from enthusiasm about a vaccine --
outperformed the broader market.
American Airlines stock gained $1.23, or 8.3%, to $16.09. Royal
Caribbean's stock added $3.76, or 4.7%, to $84.40.
The Russell 2000 of small companies advanced 0.6%.
Anna Rathbun, chief investment officer of CBIZ Investment
Advisory Services, said she increased exposure to small companies
recently, in part because of optimism about the economic recovery
and the vaccine.
"We understand that it may be rocky, but we are long-term
investors," Ms. Rathbun said of the recovery.
Uncertainty surrounding the vaccine was on display Thursday, as
Pfizer said it expects to ship half of the Covid-19 vaccines it
originally planned for this year because of supply-chain
problems.
Pfizer and BioNTech SE had hoped to roll out 100 million
vaccines world-wide by the end of the year. That plan has now been
reduced to 50 million. This development weighed on some of the
enthusiasm surrounding the vaccine late in the trading session.
In other corporate news, Tesla shares gained $24.56, or 4.3%, to
$593.38 after Goldman Sachs upgraded the stock's rating to buy and
raised the price target to $780. That's about a 31% jump from where
shares closed Thursday. Tesla will be added to the S&P 500
later this month, which would prompt passive funds that track the
index to add the stock to their portfolios.
In bond markets, the yield on the 10-year U.S. Treasury note
edged down to 0.919%, from 0.948% on Wednesday.
Overseas, the pan-continental Stoxx Europe 600 was little
changed.
European regulators are expected to make a decision on approving
the use of coronavirus-vaccine candidates at the end of the month.
Speedier moves by the U.K. and the U.S. will give those nations an
edge and could make their stocks more attractive, investors
said.
"Europe seems to be the laggard when it comes to vaccine
rollouts, it seems like it will take longer to approve," said
Shaniel Ramjee, a multiasset fund manager at Pictet Asset
Management. "And logistically, Europe is more fragmented and might
not be uniform."
In Asia, most major benchmarks ended the trading session higher.
The Shanghai Composite Index was an exception, edging down 0.2%.
American lawmakers on Wednesday approved legislation that could
result in a trading ban on the shares of U.S.-listed Chinese
companies over concerns about their audit quality.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Gunjan
Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
December 03, 2020 17:06 ET (22:06 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.