US stock benchmarks moved higher Thursday morning, and the Dow hit an intraday record, despite a report showing weekly unemployment benefit claims rose to their highest levels since August last year, as corporate disruptions were again imposed in some states to combat the coronavirus pandemic.
Investors, however, are focused on the prospect of further financial support from the government, with President-elect Joe Biden set to outline the details of more fiscal stimulus on Thursday evening.
What do the main benchmarks do?
-
The Dow Jones Industrial Average DJIA,
+ 0.37%
rose 144 points, or 0.5%, to 31,203, which hit an intraday record at 31,223.78. -
The S&P 500 index SPX,
+ 0.26%
traded 12 points, or 0.3%, higher at 3,822. -
The Nasdaq Composite Index COMP,
+ 0.60%
rose 74 points, or 0.6%, to 13,203.
The Dow DJIA,
fell less than 0.1% on Wednesday, just before a House vote to impeach President Donald Trump for instigating the January 6 Capitol riot, while the S&P 500 SPX,
and Nasdaq Composite COMP,
ended slightly higher.
What drives the market?
CNN reported that Biden, who lives in Wilmington, Del. Will speak late Thursday is ready to outline a spending package that would include more direct payments to American families and significant state and local funding.
Another round of large, direct payments to households could be the trickiest part of the package, Hussein Sayed, chief market analyst at FXTM, said in a note, as most Republicans and some Democrats in the Senate are against “too big.”
“On the other hand, the choice of a small package will disappoint investors and lead to profit-taking in the stock markets,” he said. “Finding the right balance won’t be easy.”
Additional federal spending is being talked about as a report on US weekly unemployment benefits in early January was the highest since late August, rising 181,000 to 965,000 as the COVID-19 pandemic has triggered new lockdowns across the country, it reported Labor Department Thursday. Economists had estimated, on average, that the claims would amount to 800,000.
The US added at least 230,476 new cases on Wednesday, according to a New York Times tracker, and counted at least 3,922 deaths, after a record of more than 4,400 on Tuesday, the highest number in one day since the outbreak began.
However, the higher unemployment benefit figures for early January may bolster the argument among those who argue that the economy needs more fiscal aid now that the virus is spreading again.
“At one point, tough job numbers like we saw this morning may serve as a tinder for those asking for correction, but the market believes the light at the end of the tunnel remains in sight despite a painstaking vaccination rollout. , ”Wrote Mike Loewengart, investment strategist at E-Trade Financial, in response by email.
“Furthermore, a more bleak than excepted job report translates into a greater likelihood of a full-blown stimulus package that perversely acts like a tailwind for the market,” he said.
Optimism for new aid has supported bullish predictions for market performance in 2021. In fact, Goldman Sachs’ David Kostin predicts that the S&P 500 will end at 4,300 by 2021.
Meanwhile, investors will also keep an eye on bond yields, which tipped higher last week and early this week in a move fueled by fears that a different fiscal package could fuel inflation. That could pose problems for stocks, as higher returns make higher stock prices more difficult to justify. Investors may also fear that a rebound in inflation would allow the Federal Reserve to ease its buying program more quickly than expected.
Other economic news: the US import price index is up 0.9% in December and 0.4% in December, excluding fuel prices.
Investors will also pay attention to a speech by Fed Chairman Jerome Powell at 12:30 p.m. Eastern.
Which companies is the focus on?
-
From BlackRock Inc.
BLK,
-3.27%
stocks fell 3.7% after the asset manager, with $ 8.7 trillion in assets under management, reported fourth-quarter earnings and earnings that exceeded expectations. -
Parts of Tesla Inc.
TSLA,
+ 0.30%
were 1.2% lower. The National Highway Traffic Safety Administration sent a letter to the electric vehicle manufacturer requesting a voluntary recall of 158,000 Model X units from the 2016, 2017, and 2018 model years due to a potential failure affecting safety functions, including the operation of the rear view camera. -
Google parent Alphabet Inc. shares GOOG,
+ 0.57% GOOGL,
+ 0.52%
possibly in the picture after the company said it completed the acquisition of fitness tracking company Fitbit. Alphabet’s Class A and C shares were up 0.4%. -
Cisco Systems’
CSCO,
+ 0.20%
stock was in focus after CNBC reported it was proposing a higher bitAcacia Communications
ACIA,
+ 31.87% .
Cisco shares fell 0.3%, while Acacia’s shares were up 31%. -
Shares of Virgin Galactic SPCE,
+ 20.14%
jumped more than 20% after ARK Investment Management filed with the Securities and Exchange Commission to launch an exchange-traded fund.
How are other assets traded?
-
The return on the 10-year US Treasury TMUBMUSD02Y,
0.161%
was up 1 basis point by approximately 1.10%. -
The ICE US Dollar Index DXY,
+ 0.03% ,
a measure of the coin against a basket of six major rivals, it was up 0.2%. -
Oil futures traded lower, with the US benchmark CL.1,
-0.59%
0.3% lower at $ 52.77 a barrel. Gold futures GC00,
-0.49%
traded 0.6% lower at $ 1,843.70 an ounce. -
The pan-European Stoxx 600 index SXXP,
+ 0.68%
rose 0.4% higher, while London’s FTSE 100 UKX,
+ 0.65%
was up 0.5%. -
In Asia, the Shanghai Composite SHCOMP,
-0.91%
closed 0.9% lower, while Hong Kong’s Hang Seng Index HSI,
+ 0.93%
climbed 0.9% and the Japanese Nikkei 225 index NIK,
+ 0.85%
0.9% gained