U.S. stocks tilted higher midday Thursday as technology shares led the charge in an otherwise listless day for the market as investors awaited news on a coronavirus aid package from Congress and the July employment report on Friday.
Investors also parsed a weekly snapshot of the labor market that showed fewer Americans filed for unemployment benefits than had been forecast, somewhat easing concerns about the recent impact of a resurgence of the COVID-19 pandemic on the economy.
How are equity benchmarks performing?
The Dow Jones Industrial Average
rose 31 points, or 0.1%, to 27,232. The S&P 500
was up 4 points, or 0.1%, to 3,331. The Nasdaq Composite Index
gained 40 points, or 0.4%, to 11,039, after notching a new intraday record earlier in the day.
On Wednesday, the Dow rose 373.05 points, or 1.4%, to settle at 27,201.52, its largest daily percent gain since July 14 and putting at its highest level since June 9, while the S&P 500 gained 21.26 points, 0.6%, to end at 3,327.77, putting it off 1.7% from its Feb. 19 all-time high. The Nasdaq added 57.23 points, 0.5%, closing at 10,998.40, the 31st record for the tech-heavy index.
What’s driving the market?
A day after the sharpest gain for the Dow in about three weeks, stocks largely meandered Thursday morning, before resuming the rally around noon.
The number of Americans filing for jobless benefits for the week ended Aug. 1 fell to a three-week low of 1.186 million, a decline of 249,000 from the previous week’s reading of 1.435 million. The average estimates from economists polled by Econoday were for a weekly increase in new claims to 1.442 million.
The number of people receiving traditional jobless benefits through the states, known as continuing claims, dropped by a seasonally adjusted 844,000 to 16.1 million in the week ended July 25.
“The pressure is coming off just slightly in the labor markets with unemployment claims coming down from recent highs,” said Chris Rupkey, chief financial economist at MUFG, but he added that jobless claims still remain elevated and nearly double the level last seen in at the depths of the 2007-2009 recession.
A steady decline in jobless claims briefly came to a halt in July amid a surge in Covid-19 cases in California, Texas, Florida and many other states. Some restrictions were reimposed on businesses and companies were forced to lay off or furlough workers, some for the second time.
Confirmed global cases of COVID-19 approached 19 million on Thursday, according to data aggregated by Johns Hopkins University, and the death toll rose to 708,036. The U.S. case tally climbed to 4.8 million, while the death toll rose to 158,256.
Rising cases have put in doubt hopes for a so-called V-shaped, or sharp and quick, economic recovery from the recession created by the pandemic.
Meanwhile, congressional lawmakers struggled to strike a deal on a fresh round of coronavirus relief for those Americans out of work. At the same time, Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi both told CNBC that they remained optimistic on an agreement.
Democrats and Republicans have been at loggerheads, as they run up against a self-imposed deadline of Friday, over the scope of any new aid package, including over how much to provide in federal jobless assistance, which provided an extra $600 a week before it expired in July, in addition to state provided benefits.
The Trump administration on Wednesday floated the idea of taking executive action if Democrats and Republicans aren’t able to reach a compromise on providing further assistance to those worst hit by the viral outbreak.
“If Congress can’t get it done, the president of the United States will,” White House Chief of Staff Mark Meadows told CNN in a Wednesday interview, a point that Trump reiterated at a news conference. “We are negotiating right now as we speak, and we’ll see how it works out,” the president said.
Meanwhile, signs of growing China-U.S. tensions were evident as U.S. Secretary of State Mike Pompeo asked American companies to consider withholding their apps from phones made by China’s Huawei Technologies, according to analysts. Those comments come as the U.S. has threatened to ban China-owned entertainment applications TikTok unless Microsoft Corp.
can strike a deal to buy all or part of the company from ByteDance.
Which stocks are in focus?
- Burger King parent Restaurant Brands International Inc.
shares fell 3.5% after it reported Thursday second-quarter profit that beat expectations, as revenue fell 25% but topped forecasts.
- ViacomCBS Inc.
rose 3.5%, after the company posted better-than-expected profit and sales for the second quarter.
- Mylan N.V.
stock fell 4.4% after sales fall slightly short of estimates.
- Bausch Health Cos. shares
climbed more than 5%, after a Wall Street Journal report that the company is planning to spin off its eye-care business from its core pharma operations, citing people familiar with the matter.
- Shares of Hilton Worldwide Holdings Inc.
rose 1.2% Thursday, even after the hotel operator reported a second-quarter loss that was wider than expected, with revenue dropping 77%, as the COVID-19 pandemic had a “significant adverse impact” on occupancy.
- Bristol-Myers Squibb Co.
shares gained 2.6% on better-than-expected earnings and a positive patent ruling for its blood thinner drug.
- Costco Wholesale Corp.
shares inched up 0.7% on Wednesday after it said that July sales rose 14% to $13.04 billion, from $11.43 billion in July 2019. Same-store sales rose 13.2%, including a 13.3% increase in U.S. same-store sales. E-commerce sales increased 75.3%, the company said.
- ADT Inc.
shares fell 6.4% after the security products company’s revenue topped Wall Street estimates. The company last week struck an agreement with Google parent Alphabet Inc.
to create smart home security products.
- Western Digital Corp. shares
tumbled more than 16% following an earnings report that included a disappointing forecast for the hard-drive maker’s new fiscal year.
How are other markets trading?
The greenback was virtually unchanged, with the ICE U.S. Dollar index
down 0.1% at 92.77.
Oil futures turned lower after hitting their highest close in five months, with the U.S. benchmark
down 0.6% to $41.93a barrel on the New York Mercantile Exchange. Gold futures for December
strung its fifth consecutive gain to book another record, gaining $20.40, or 1%, to settle at $2051.50 an ounce.