U.S. Stocks Moderately Higher Amid Continued Stimulus OptimismOctober 15, 2020
Stocks have moved moderately higher in morning trading on Thursday, adding to the strong gains posted in the previous session. With the upward move, the major averages have reached their best intraday levels in a month.
Currently, the major averages are off their highs of the session but remain in positive territory. The Dow is up 82.80 points or 0.3 percent at 28,386.26, the Nasdaq is up 21.01 points or 0.2 percent at 11,385.61 and the S&P500 is up 15.74 points or 0.5 percent at 3,435.19.
The strength on Wall Street reflects continued optimism about a coronavirus stimulus bill following the latest comments from President Donald Trump.
In an interview with Maria Bartiromo on Fox Business, Trump said administration officials and Democrats are “starting to have some very productive talks.”
“We started talking again. And we’re talking about airlines and we’re talking about a bigger deal than airlines,” Trump said. “We’re talking about a deal with $1,200 per person, we’re talking about other things.”
Trump abruptly pulled out of negotiations of a new stimulus earlier this week but now says “we have a really good chance of doing something.”
However, buying interest has remained somewhat subdued following the release of a report from the Labor Department showing initial jobless claims came in above estimates in the week ended October 3rd.
The Labor Department said initial jobless claims edged down to 840,000, a decrease of 9,000 from the previous week’s revised level of 849,000.
Economists had expected jobless claims to dip to 820,000 from the 837,000 originally reported for the previous week.
“Failure to pass additional fiscal relief measures will lead to more new claims given the announcement of layoffs by many firms,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics. “It also raises the risk that some individuals will lose benefits altogether at the start of 2021.”
Airline stocks are turning in some of the market’s best performances, resulting in a 2.9 percent spike by the NYSE Arca Airline Index.
Considerable strength is also visible among computer hardware stocks, as reflected by the 2 percent gain being posted by the NYSE Arca Computer Hardware Index
Oil service stocks have also shown a significant move to the upside on the day, driving the Philadelphia Oil Service Index up by 1.8 percent.
The rally by oil service stocks comes amid a sharp increase by the price of crude oil, with crude for November delivery jumping $1.11 to $41.06 a barrel.
Networking, housing and pharmaceutical stocks are also seeing notable strength, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index jumped by 1 percent, while Australia’s S&P/ASX 200 Index surged up by 1.1 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index is up by 1.1 percent, the French CAC 40 Index is up by 0.7 percent and the U.K.’s FTSE 100 Index is up by 0.6 percent.
In the bond market, treasuries are seeing modest strength after moving notably lower in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1 basis point at 0.775 percent.
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