SHARES on Wall Street ended higher on Thursday in choppy trading, as investors cheered the prospect of more fiscal stimulus to support a pandemic-damaged U.S. economy, with more data pointing to a slowing labour market recovery.
Trading on Wall Street this week has been driven by a flurry of reports related to developments in the stimulus talks.
U.S. House of Representatives speaker Nancy Pelosi reported progress in talks with the Trump administration for another round of financial aid and said legislation could be hammered out “pretty soon”.
However, White House economic adviser Larry Kudlow cautioned “significant policy differences” remained, which were unlikely to be resolved before the Nov 3 election.
“These stimulus rumours continue to swirl,” Harvest Volatility Management head of trading Mike Zigmont said. “But I think the market is getting accustomed to these rumours and each new rumour has less of an impact than it used to.”
He was also not confident that another stimulus deal would pave the way for another bullish trend in stocks.
“The second stimulus as a topic has been kicking around for so long. The bulk of the economic consequences has already been baked into stock prices,” Zigmont said. “And now it is strictly an emotional issue, a perception-in-the-market type of issue.”
Pelosi and Treasury Secretary Steven Mnuchin have been negotiating a relief bill near the US$2 tri mark, a sum opposed by Senate Republicans who have expressed concern about the federal deficit.
Also on Thursday, data showed the number of Americans filing for state unemployment benefits last week dropped more than expected to 787,000, but remained stubbornly high as support from fiscal stimulus faded.
Investors will monitor the final presidential debate on Thursday night between Trump and Democratic challenger Joe Biden who is ahead in national polls.
Meanwhile, about a fifth of S&P 500 companies have reported third-quarter results, of which 84.1% beat earnings estimates, according to IBES Refinitiv data.
Tesla Inc climbed 0.7% after the electric-car maker reported its fifth consecutive quarterly profit on record revenue of US$8.8 bil.
Chipotle Mexican Grill Inc fell 4.8% as it posted a drop in quarterly profit, hurt by higher beef prices, delivery costs and coronavirus-related expenses.
Among blue-chip companies, Coca-Cola Co gained 1.4% as it beat quarterly results expectations, while chemicals maker Dow Inc fell 0.6% even as it surpassed quarterly profit estimates.
The S&P 500 posted 23 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 57 new highs and 32 new lows. – Oct 23, 2020