Wall Street closes higher, trade choppy as U.S. stimulus talks eyed
FILE PHOTO: The front facade of the New York Stock Exchange (NYSE) is seen in New York City, New York, U.S., June 26, 2020. REUTERS/Brendan McDermid
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By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - Shares on Wall Street ended higher on Thursday in choppy trading, as investors cheered the prospect of more fiscal stimulus to support a pandemic-damaged U.S. economy, with more data pointing to a slowing labor market recovery.
Trading on Wall Street this week has been driven by a flurry of reports related to developments in the stimulus talks.
U.S. House of Representatives Speaker Nancy Pelosi reported progress in talks with the Trump administration for another round of financial aid and said legislation could be hammered out "pretty soon".
However, White House economic adviser Larry Kudlow cautioned "significant policy differences" remained, which were unlikely to be resolved before the Nov. 3 election.
"These stimulus rumors continue to swirl," said Mike Zigmont, head of trading at Harvest Volatility Management. "But I think the market is getting accustomed to these rumors and each new rumor has less of an impact than it used to."
He was also not confident that another stimulus deal would pave the way for another bullish trend in stocks.
"The second stimulus as a topic has been kicking around for so long. The bulk of the economic consequences has already been baked into stock prices," Zigmont said.
"And now it is strictly an emotional issue, a perception-in-the-market type of issue."
Pelosi and Treasury Secretary Steven Mnuchin have been negotiating a relief bill near the $2 trillion mark, a sum opposed by Senate Republicans who have expressed concern about the federal deficit.
Also on Thursday, data showed the number of Americans filing for state unemployment benefits last week dropped more than expected to 787,000, but remained stubbornly high as support from fiscal stimulus faded.
The Dow Jones Industrial Average <.DJI> closed 152.84 points higher, or 0.54%, to 28,363.66, the S&P 500 <.SPX> gained 17.93 points, or 0.52%, to 3,453.49 and the Nasdaq Composite <.IXIC> added 21.31 points, or 0.19%, to 11,506.01.
Energy <.SPNY> and financials <.SPSY> rose 4.16% and 1.88%, respectively, posting the steepest gains among the major S&P sectors.
Investors will monitor the final presidential debate on Thursday night between Trump and Democratic challenger Joe Biden who is ahead in national polls.
After the bell, shares of Gilead Sciences Inc. (NASDAQ: GILD) rose 3.16% after the U.S. Food and Drug Administration in the late afternoon approved its antiviral drug Veklury, or remdesivir, for the treatment of patients with COVID-19, requiring hospitalization.
Meanwhile, about a fifth of S&P 500 companies have reported third-quarter results, of which 84.1% beat earnings estimates, according to IBES Refinitiv data.
Tesla Inc (NASDAQ: TSLA) climbed 0.7% after the electric-car maker reported its fifth consecutive quarterly profit on record revenue of $8.8 billion.
Chipotle Mexican Grill Inc (NYSE: CMG) fell 4.8% as it posted a drop in quarterly profit, hurt by higher beef prices, delivery costs and coronavirus-related expenses.
Among blue-chip companies, Coca-Cola Co (NYSE: KO) gained 1.4% as it beat quarterly results expectations, while chemicals maker Dow Inc (NYSE: DOW) fell 0.6% even as it surpassed quarterly profit estimates.
Advancing issues outnumbered declining ones on the NYSE by a 1.90-to-1 ratio; on Nasdaq, a 1.68-to-1 ratio favored advancers.
The S&P 500 posted 23 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 57 new highs and 32 new lows.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by David Gregorio)
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