U.S. stocks closed at fresh records Thursday as lawmakers closed in on a deal to extend a new financial lifeline to businesses and individuals that could support the economy through the coronavirus pandemic’s deadliest phase.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite notched both intraday highs and new closing records during a mostly upbeat trading session. Nine of the 11 major S&P 500 sectors notched gains, with some of the biggest advances coming out of the health-care, technology and real-estate sectors.
That lifted the S&P 500 up 21.31 points, or 0.6%, to 3722.48 after touching a high of 3735.12 earlier in the day. The Dow Jones Industrial Average rose 148.83 points, or 0.5%, to 30303.37, while the Nasdaq Composite added 106.56 points, or 0.8%, to 12764.75.
Analysts pointed to optimism from investors that lawmakers remain committed to reaching a deal on providing roughly $900 billion in coronavirus relief. Negotiations continued Thursday on the package that includes another round of direct payments to households. After months of gridlock, the emerging agreement represented a breakthrough at a critical time in the pandemic. Vaccine distribution is under way but hospitalizations are hitting record highs.
Lawmakers initially hoped to approve the relief bill alongside a broad government spending package before current government funding expires just after midnight on Saturday. But Congressional leaders are now considering passing a stopgap spending measure to give themselves more time to wrap up negotiations on the bill, extending the timeline for approval.
Investors broadly think a new dose of stimulus is necessary to gird the economy until the end of winter and widespread vaccinations have the potential to bring the virus under control in 2021. Rising cases appear to have hit consumer sentiment, weighing on retail sales. There are also new business restrictions in some states.
“The stimulus is key,” said Mary Nicola, a portfolio manager at PineBridge Investments.
Labor-market data on Thursday added to evidence that the economy has hit a speed bump. Initial claims for unemployment benefits rose by 23,000 to 885,000 in the week ended Dec. 12. Economists had been expecting a small decline.
“Any stimulus is good stimulus at this point, especially when you’re coming through a rough patch,” Ms. Nicola added. “This will provide a bit more of a boost to the recovery.”
On Thursday, shares of several companies notched bigger gains after reporting upbeat quarterly results. Lennar added $5.66, or 7.6%, to $79.95 after the home builder said first-quarter home deliveries and orders would be stronger than analysts expected.
Shares of Rite Aid jumped $2.97, or 17%, to $20.08 after the pharmacy chain topped analysts’ expectations, and Accenture rose $17.02, or 6.9%, to $264.47 after the consulting firm also exceeded Wall Street’s projections.
International markets advanced Thursday. The regionwide Stoxx Europe 600 gained 0.3%, led by shares in economically sensitive commodity producers and retailers alongside media companies. China’s Shanghai Composite Index ended 1.1% higher. Japan’s Nikkei 225 ticked up 0.2%.
In bonds, the yield on 10-year Treasury notes edged up to 0.929% from 0.920% Wednesday. The dollar extended its recent slide. The WSJ Dollar Index fell 0.3% after dropping to its lowest level since April 2018 on Wednesday.
That decline came after the Federal Reserve said $120 billion a month in asset purchases will continue until substantial progress has been made toward its employment and inflation goals.
The updated guidance underscores that the central bank will remain supportive of financial markets for some time to come, analysts and investors said.
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Appeared in the December 18, 2020, print edition as ‘Stocks Set Records on Stimulus.’