By Caitlin Ostroff and Dawn Lim
U.S. stocks edged slightly higher Thursday as investors tried to
gauge the prospects of Washington passing an additional stimulus
package to bolster the economy before next month's election.
The S&P 500 rose 17.80 points, or 0.5%, to 3380.80,
following its best six-month performance since 2009. Despite a
decline in September, the benchmark is up more than 35% over the
past six months. The Dow Jones Industrial Average rose 35.20
points, 0.1%, to 27816.90. Both indexes pared earlier gains.
The technology heavy Nasdaq Composite advanced 159 points, or
1.4%, to 11326.51.
"The market is grappling with which way to go given how
important fiscal stimulus is to the sustainability of the economic
recovery," said Mark Luschini, chief investment strategist at
Janney Montgomery Scott.
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 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
The prospects of a deal between lawmakers and the Trump
administration on Thursday afternoon remained dim.
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.
The data signal an improving labor market, though unemployment
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
New figures from the Commerce Department show U.S. consumer
spending rose 1% in August while incomes fell, in part because of a
decline in government aid for unemployed workers.
Some believe central bank stimulus measures will keep markets
"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 been an uneven rally, investors said.
Within the S&P 500, the energy sector was by far the weakest
performer Thursday, falling 3.1%.
"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 rose 0.2% in the S&P 500 Thursday, but the
sector has dropped 22% this year. Only the energy group, with 52%
decline, has fared worse.
In corporate news, shares of Boeing rose $2.60, or 1.6%, to
$167.86 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 gained $2.20, or 1.59%,
to $140.80, after the drinks and snacks company beat earnings
In bond markets, the yield on the benchmark 10-year Treasury
settled at 0.677% Thursday, unchanged from 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 firstname.lastname@example.org and Dawn Lim
(END) Dow Jones Newswires
October 01, 2020 16:59 ET (20:59 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.