Stocks gave up some of their morning gains on Thursday, after House speaker Nancy Pelosi said that she wouldn’t support a narrower stimulus bill including targeted aid for airlines. It remains all or nothing for a fiscal and coronavirus relief package, with party leaders still far apart on its size and scope.
Indexes across the globe were still holding on to modest gains, however, helped by a number of incrementally positive factors.
There was reason for optimism on the Covid-19 vaccine and treatment front, with President Donald Trump touting
’ (ticker: REGN) antibody cocktail and the company saying it would seek emergency use authorization. Betting odds of a Democratic election victory in November ticked higher after Wednesday night’s vice-presidential debate, increasing the odds of a multi-trillion dollar fiscal stimulus bill should one party control Washington.
And although initial jobless claims remained high, continuing claims fell from a week ago and came in below economists’ consensus. Although at a slower pace than over the summer, the U.S. economy continues to recover. Technically minded traders noted that after a string of recent gains, the
just crossed above its 50-day moving average.
Dow Jones Industrial Average
climbed 60.92 points, or 0.2%. The S&P 500 was up 0.6% and the
rose 1% in Tokyo and the
added 0.2% in Seoul, while the
eased by 0.2%. The Stoxx Europe 600 was 1% higher, led by a 1.1% gain for the German
U.S. stocks rallied strongly on Wednesday, with the Dow gaining 530 points, after both President Donald Trump and House Speaker Nancy Pelosi indicated support for some amount of stimulus before the election.
The latest figures on employment in the U.S. underscored the need for aid. Initial claims for unemployment benefits fell by 9,000, to a total of 840,000 in the latest week. The figure was in line with the expectations for 837,000. Continuing claims fell to 10.976 million, below forecasts for 11.5 million, but still high.
“Whether due to residual hopes that piecemeal U.S. budget support measures might yet find agreement, or, more likely, that polls increasingly point to a [Joe] Biden win in early November and a Democrat-controlled Senate, investors appear to be concluding that more fiscal stimulus is certain even if its timing is not,” said Emily Nicol, an economist for Daiwa in London.
Tom Porcelli, chief U.S. economist at RBC Capital Markets, said a stimulus package in the area of $700 billion would likely be enough of an insurance policy through the end of the first quarter of 2021 against a deteriorating backdrop due to Covid.
The debate between Vice President Mike Pence and Democratic vice-presidential nominee Kamala Harris on Wednesday night was a more traditional clash than the first presidential debate, and widely perceived as not having changed the dynamic of the election.
(MS) shares gained 0.6% after the bank announced it was going to buy
(EV) in a $7 billion cash and stock deal. Shares of Eaton Vance soared 47.9%. The deal comes just after Morgan Stanley completed its acquisition of E*Trade Financial.
Regeneron Pharmaceuticals shares climbed 2.2% after Trump touted the company’s Covid-19 antibody treatment, which he took last week. Regeneron submitted a request for an emergency-use authorization to the U.S. Food and Drug Administration to make the experimental treatment more widely available.
(DPZ) shares slid 6.9% after management reported weaker-than-expected profits for the third quarter. The pizza chain has been helped by a surge in at-home dining but high pandemic-related costs weighed on the results.
(IBM) announced it will split its managed infrastructure arm into a new public company. Shares rose 5.2%, boosting the Dow.
(COST) reported 17% sales growth in September, as the retailer continues to flourish during the Covid-19 pandemic. Shares added 0.4%.