Wall Street’s main indexes climbed on Thursday as investors looked to corporate earnings and signs of progress on a pandemic-relief package after data suggested the labor market was stabilizing.
The Labor Department’s report showed 779,000 Americans filed new applications for unemployment benefits last week, lower than 812,000 in the prior week, as authorities started to loosen pandemic-related restrictions on businesses.
The government’s closely watched and comprehensive monthly employment report, due on Friday, is also expected to show an addition of 50,000 jobs in January after a sharp drop in December.
Democrats in the Senate were poised on Thursday to take a first step toward President Joe Biden’s $1.9 trillion COVID-19 relief proposal, in a marathon “vote-a-rama” session aimed at overriding Republican opposition to the package.
“There’s a need out there still for fiscal relief for impacted workers, and it’s easier to get done when it’s viewed as a bridge to the other side of this pandemic,” said Matt Stucky, portfolio manager at Northwestern Mutual Wealth Management Co in Milwaukee.
“Vaccine deployments are accelerating and earnings are coming in much better than expected. While there’s still a lot of uncertainty out there, those more positive themes are probably reassuring investors.”
Nine of the 11 major S&P sectors advanced with financial, industrials and technology gaining the most.
All the three major indexes have bounced back sharply this week as investors monitored talks over the next round of fiscal stimulus and as a recent buying frenzy driven by social media appeared to stall following a bout of market volatility last week.
Videogame retailer GameStop Corp fell 26.5%, while cinema operator AMC Entertainment Holdings Inc slipped 13.2% as Treasury Secretary Janet Yellen said that she and financial market regulators needed to “understand deeply” what happened in the recent retail trading frenzy before taking any action.
However, concerns over heightened stock market valuations, raging pandemic and new coronavirus variants have kept investors on edge with attention turning towards earnings outlook from corporate America to justify it.
S&P 500 companies are on track to post earnings growth for the fourth quarter of 2020, Refinitiv data showed on Wednesday, which would defy expectations for profits to drop 10% due to the pandemic.
At 12:10 p.m. ET, the Dow Jones Industrial Average was up 259.01 points, or 0.84%, at 30,982.61, the S&P 500 was up 28.52 points, or 0.74%, at 3,858.69, and the Nasdaq Composite was up 101.81 points, or 0.75%, at 13,712.35.
A pandemic-driven surge in online shopping during the holiday season helped e-commerce firm eBay Inc and payment platform PayPal Holdings Inc top quarterly earnings estimates. EBay and PayPal both jumped 5.4%.
Advancing issues outnumbered decliners 1.95-to-1 on the NYSE and 2.57-to-1 on the Nasdaq.
The S&P index recorded 20 new 52-week highs and no new low, while the Nasdaq recorded 198 new highs and two new lows.