Dow and major stock indices post gains, break 2-day losing streak, on hopes of tax relief

<p>Benchmarks of U.S. stocks finished slightly higher on Thursday, culminating a turbulent session as investors were buoyed by hopes that Washington lawmakers could still come together and pass a coronavirus aid package. to limit the economic damage caused by the pandemic.

Optimism around the additional tax help helped ease market concerns about how rising COVID-19 cases and new social distancing restrictions could affect the economic outlook.

The Dow Jones Industrial Average DJIA, -0.74%, rose 44.81 points, or 0.2%, to close at 29,483.23, while the S&P 500 SPX Index, -0.67% gained 14.08 points, or 0 , 4%, ending at 3,581.87. The Nasdaq Composite Index COMP, -0.41%, advanced 103.11 points, or 0.9%, to end at 11,904.71.

Stocks fell for a second day on Wednesday, amplifying losses in late trading after New York City decided to close public schools due to rising infection rates.

What drove the market?

Stocks ended higher, following talks about resuming stimulus negotiations, even as investors faced a continued rise in COVID-19 infections.

Senate Minority Leader Chuck Schumer, D-New York, said Mitch McConnell, R-Kentucky, had agreed to restart negotiations on a new coronavirus aid package. Until now, Republicans and Democrats have disputed the size and scope of a possible aid bill.

“There is still looming hope that talks will resume and an agreement can be reached by the end of the year. The market really wants this, ”Yung Yu-Ma, chief investment strategist at BMO Wealth Management, said in an interview.

The advance gave stocks a boost in the afternoon. But investors remained cautious, re-investing in large-cap tech-rated stocks that have thrived on work-from-home deals.

The choppy trading on Wall Street comes as strategists and investors weigh a number of positive developments toward a COVID-19 vaccine and its likely impact on the future of America’s economic recovery.

“The death toll in the United States from COVID-19 has passed 250,000, but what really shook Wall Street on Wednesday was the news closer to home,” Raffi Boyadjian, senior investment analyst at XM, said in a note. , referring to the decision to close New York City public schools effective Thursday.

New York City announced the closure of all public schools after the city’s positivity rate for virus tests reached a seven-day average of 3%, the threshold set for keeping schools open.

“This is not the trajectory we want to see, and it underscores the fact that the lockdowns taking place 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 comments sent by email.

On Wednesday, the United States recorded 172,391 new cases and at least 1,923 deaths, according to New York Times data. That raised the daily average for the past week to 162,816, 77% more than two weeks ago. The death toll in the United States was 250,548 as of Wednesday.

See: ‘Depressed, Disheartened and Tired to the Bone’: Coronavirus overwhelms US hospitals.

Meanwhile, progress toward a vaccine continues. Pfizer Inc. PFE, + 1.40% and BioNTech SE BNTX, + 9.62% said Wednesday that their vaccine candidate was 95% effective, according to a final analysis of clinical trial data. Moderna Inc. MRNA, + 5.21% on Monday said their vaccine candidate was 94.5% effective. Both are expected to apply for US regulatory clearance in a few days.

On Thursday, British drugmaker AstraZeneca PLC AZN, + 2.36% AZN, + 2.35% said that the experimental vaccine it is developing with the University of Oxford showed a robust immune response in older adults, according to data from intermediate-stage trials.

On the data front, US claims for state unemployment benefits spiked in mid-November for the first time in more than a month, pointing to additional stress on the economy from a record spike in coronavirus cases.

Initial jobless claims increased by 31,000 to 742,000 seasonally adjusted in the seven days ending Nov. 14. Economists surveyed by MarketWatch had predicted that initial jobless claims would total 710,000.

Separately, a report on manufacturing activity in the Philadelphia area showed a 6-point drop to 26.3 in November.

An update of the main economic indicators rose 0.7% last month, the Conference Board said on Thursday, following a rise of 0.7% in September and 1.6% in August. And sales of existing homes in the United States increased 4.3% to a rate of 6.85 million in October.

What companies were in focus? Shares of Sonos Inc. SONO, -5.63%, rose 29.8% after the speaker and audio equipment maker beat sales expectations for the September quarter. Nvidia Corp. NVDA, -2.62% shares rose 0.1%, despite quarterly results that beat estimates, with sales topping $ 4 billion for the first time when the chipmaker launched new game cards and demand. of data centers remained strong. Macy’s Inc.M shares, -1.41% reversed a more than 7% decline to finish 2.1% higher, as the department store chain reported results showing a shift to a less than expected loss and revenue. They exceeded expectations. Nasdaq Inc. NDAQ, + 1.25% announced Thursday an agreement to buy private financial crime management company Verafin for $ 2.75 billion in cash. The shares were up 1.7%. How did other assets fare?

The pan-European Stoxx 600 SXXP index, + 0.51% closed 0.6% lower, while the UK FTSE 100 UKX index, + 0.27% registered a drop of 0.8%. In Asian markets, China’s Shanghai Composite Index SHCOMP, + 0.43% closed 0.5% higher, the CSI 300 000 300, + 0.31% ended 0.7%, while Hang Seng HSI closed Hong Kong, + 0.35% recorded a loss of 0.7%. Japan’s Nikkei 225 NIK index, -0.41% closed 0.4% lower.

The yield on the 10-year Treasury note TMUBMUSD10Y, 0.834% fell 3 basis points to around 0.854%. Yields and prices move in opposite directions.

The ICE US Dollar Index DXY, + 0.11%, an indicator of the strength of the dollar against its main rivals, was 0.1% lower.

Crude oil futures CL.1, + 0.04% retreated, falling 0.2% after posting its highest sell-off since September on vaccine optimism, to end at $ 41.74 a barrel. Meanwhile, GOLD gold futures, + 0.41% fell $ 12.40, or 0.7%, to settle at $ 1,861.50 an ounce, their third consecutive loss.

-With reports from William Watts

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