U.S. equity benchmarks finished slightly higher Thursday, capping a turbulent session, as investors were buoyed by hopes that Washington lawmakers still could come together and pass a coronavirus aid relief package to limit the economic damage wrought by the pandemic.
Optimism around additional fiscal aid helped ease market concerns about how rising COVID-19 cases and new social-distancing restrictions might impinge on the economic outlook.
How did major benchmarks do?
The Dow Jones Industrial Average DJIA, +0.15% rose 44.81 points, or 0.2%, to close at 29,483.23, while the S&P 500 index SPX, +0.39% gained 14.08 points, or 0.4%, ending at 3,581.87. The Nasdaq Composite Index COMP, +0.87% advanced 103.11 points, or 0.9%, to finish at 11,904.71.
What drove the market?
Equities finished higher, following talk of revived stimulus negotiations, even as investors contended with a continued surge in COVID-19 infections.
Senate Minority Leader Chuck Schumer, D-NY., said Mitch McConnell, R-Ky., had agreed to restart negotiations over a new coronavirus aid relief package. Up to now, Republicans and Democrats were disputing the size and scope of a potential aid bill.
“There are still budding hopes talks will get restarted and a deal could be potentially reached by year-end. The market does really want this,” said Yung Yu-Ma, chief investment strategist at BMO Wealth Management, in an interview.
The breakthrough gave a lift to stocks in the afternoon. But investors remained cautious, edging back into large-capitalization technology-rated stocks that have thrived from work-from-home arrangements.
The choppy trade on Wall Street comes as strategists and investors weigh a slate of positive developments toward a COVID-19 vaccine and its likely impact on the future of the U.S. economic recovery.
“The death toll in the United States from COVID-19 has now surpassed 250,000, but what really shook Wall Street on Wednesday was news from closer to home,” said Raffi Boyadjian, senior investment analyst at XM, in a note, referring to the decision to close New York City public schools beginning Thursday.
New York City announced the closure of all public schools after the city’s positivity rate from virus tests reached a seven-day average of 3%—the threshold set to keep schools open.
“This isn’t the trajectory we want to see, and it underscores the fact that lockdowns kicking in across the country have a very real and negative effect on the labor market,” wrote Mike Loewengart, managing director of investment strategy at E-Trade Financial in emailed remarks.
On Wednesday, the U.S. recorded 172,391 new cases and at least 1,923 deaths, according to New York Times data. That lifted the daily average over the past week to 162,816, up 77% from two weeks ago. The number of U.S. deaths stood at 250,548 as of Wednesday.
Meanwhile, progress continues toward a vaccine. Pfizer Inc. PFE, -0.35% and BioNTech SE BNTX, +4.96% on Wednesday said their vaccine candidate was 95% effective, according to a final analysis of clinical trial data. Moderna Inc. MRNA, +4.36% on Monday said its vaccine candidate was 94.5% effective. Both are expected to apply for U.S. regulatory authorization within days.
On Thursday, British drugmaker AstraZeneca PLC AZN, -0.67% AZN, +0.07% said the experimental vaccine it is developing with the University of Oxford showed a robust immune response in older adults, based on data from mid-stage trials.
On the data front, U.S. applications for state unemployment benefits rose in mid-November for the first time in more than a month, pointing to added stress on the economy from a record increase in coronavirus cases.
Initial jobless claims increased by a seasonally adjusted 31,000 to 742,000 in the seven days ended Nov. 14. Economists polled by MarketWatch had forecast initial jobless claims to total 710,000.
Separately, a report on manufacturing activity in the Philadelphia area showed a fall of 6 points to 26.3 in November.
An update on leading economic indicators rose 0.7% last month, the Conference Board said Thursday, following an increase of 0.7% in September and 1.6% in August. And U.S. existing home sales increased 4.3% to 6.85 million rate in October.
Which companies were in focus?
- Shares of Sonos Inc. SONO, +29.84% jumped 29.8% after the maker of speakers and audio equipment topped sales expectations for the September quarter.
- Nvidia Corp. NVDA, +0.08% shares rose 0.1%, despite quarterly results that blew past estimates, with sales topping $4 billion for the first time as the chip maker rolled out new gaming cards and data-center demand remained strong.
- Macy’s Inc. M, +2.11% shares reversed a more than 7% decline to end 2.1% higher, as the department-store chain reported results that showed a swing to a smaller-than-expected loss and revenues that beat expectations.
- Nasdaq Inc. NDAQ, +1.65% announced Thursday a deal to buy privately held anti-financial crime management company Verafin for $2.75 billion in cash. Shares rose 1.7%.
How did other assets fare?
The pan-European Stoxx 600 index SXXP, -0.75% closed 0.6% lower, while the U.K.’s FTSE 100 index UKX, -0.79% booked a 0.8% decline. In Asian markets, China’s Shanghai Composite Index SHCOMP, -0.00% closed 0.5% higher, the CSI 300 000300, +0.06% finished up 0.7%, while Hong Kong’s Hang Seng HSI, +0.27% booked a 0.7% loss. Japan’s Nikkei 225 index NIK, -0.64% closed 0.4% lower.
The ICE U.S. Dollar Index DXY, +0.04%, a gauge of the greenback’s strength against its major rivals, was 0.1% lower.
Crude-oil futures CL.1, -0.04% pulled back, falling 0.2% after notching their highest settlement since September on vaccine optimism, to end at $41.74 a barrel. Meanwhile, gold futures GOLD, -1.14% fell $12.40, or 0.7%, to settle at $1,861.50 an ounce, its third straight loss.
-With reporting from William Watts
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