By Caitlin Ostroff and Dawn Lim
U.S. stocks continued their march higher Thursday, following the
S&P 500's best six-month performance since 2009.
The broad stock market index 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 0.3%. The Nasdaq
Composite increased 1.2%.
Investors are waiting to see if Congress will pass another aid
package that would bolster U.S. economic growth ahead of next
month's presidential election, though such hopes have largely
receded in recent weeks.
"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
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
The lead-up to the presidential election -- and the prospect of
a contested outcome -- is keeping a lid on the rally and creating
turbulence in markets, traders said.
"It's a lot of maybe and maybe not," said Kathryn Kaminski,
chief research strategist at AlphaSimplex Group. "We have a
positive view on U.S. stocks, but are still skeptical."
Investors are also still assessing the course of the
coronavirus. 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
Activity in the U.S. manufacturing sector kept growing in
September, albeit at a slightly slower speed than that of August,
data from a survey compiled by the Institute for Supply Management
U.S. consumer spending rose 1% in August while incomes fell, in
part because of a decline in government aid for unemployed
Some believe the central banks' stimulus measures will keep
"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."
The Nasdaq Composite's stronger performance than other major
indexes show that technology has been a major recipient of what has
ultimately an uneven rally, investors said.
Within the S&P 500, the energy sector was by far the weakest
performer Thursday, falling 2.7%.
"There still has not been a dramatic amount of broad-based
support, especially in energy and financials," said Jeremy Bryan,
portfolio manager at Gradient Investments. "Those are the poster
children of continued underperformance."
Financial stocks ticked up 0.3% in the S&P 500 Thursday, the
sector has dropped 21% this year. Only the energy group, with a 51%
decline, has fared worse.
In corporate news, shares of Boeing rose 1.2% 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 edged up 1% after the drinks and
snacks company beat earnings estimates.
In bond markets, the yield on the benchmark 10-year Treasury
ticked up to 0.691%, from 0.677% Wednesday. In currency markets,
investors' continued expectations of Fed stimulus, as well as
heightened appetite for risk-taking outside the U.S., has
contributed to the weakening of the dollar. The WSJ Dollar Index,
which tracks the greenback against a basket of other major
currencies, fell 0.1%.
Overseas, the pan-continental Stoxx Europe 600 rose 0.2%. 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 email@example.com and Dawn Lim
(END) Dow Jones Newswires
October 01, 2020 14:05 ET (18:05 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.