U.S. Stocks Reach Record Closing Highs On Signs Of Progress In Stimulus Talks
After moving to the upside early in the session, stocks remained firmly positive throughout the trading day on Thursday. With the upward move on the day, the major averages all reached new record closing highs.
The tech-heavy Nasdaq saw further upside going into the close, reaching a new high for the session. The Dow rose 148.83 points or 0.5 percent to 30,303.37, the Nasdaq advanced 106.56 points or 0.8 percent to 12,764.75 and the S&P 500 climbed 21.31 points or 0.6 percent to 3,722.48.
The early strength on Wall Street came amid positive developments on the stimulus front, with lawmakers signaling progress toward an agreement on a new relief package.
Following a meeting with other congressional leaders, Senate Majority Leader Mitch McConnell, R-Ken., said the talks have made “major headway toward hammering out a targeted pandemic relief package that would be able to pass both chambers with bipartisan majorities.”
Senate Minority Leader Chuck Schumer, D-N.Y., agreed that the two sides are “close to an agreement” but cautioned that it’s “not a done deal yet.”
Meanwhile, House Speaker Nancy Pelosi’s Deputy Chief of Staff Drew Hammill said the Speaker, Schumer and Treasury Secretary Steven Mnuchin spoke Wednesday night as part of a series of phone conversations to complete the relief negotiations.
“All three emphasized the urgency to reaching an immediate agreement and will exchange additional paper and resume conversations in the morning,” Hammill said in a post on Twitter.
The positive sentiment was partly offset by a report from the Labor Department showing an unexpected increase in first-time claims for U.S. unemployment benefits in the week ended December 12th.
The report said initial jobless claims rose to 885,000, an increase of 23,000 from the previous week’s revised level of 862,000.
The continued increase surprised economist, who had expected jobless claims to drop to 800,000 from the 853,000 originally reported for the previous week.
With the unexpected increase, jobless claims climbed to their highest level since hitting 893,000 in the week ended September 5th.
However, while the data has raised concerns about the outlook for the labor market, it could also put further pressure on lawmakers to reach an agreement on a stimulus bill.
Gold stocks showed a substantial move to the upside on the day, driving the the NYSE Arca Gold Bugs Index up by 3.6 percent to its best closing level in a month.
The rally by gold stocks comes amid a sharp increase by the price of the precious metal, with gold for February delivery spiking $31.30 to $1,890.40 an ounce.
Considerable strength was also visible among housing stocks, resulting in a 2.8 percent jump by the Philadelphia Housing Sector Index. The index reached a nearly two-month closing high.
The strength among housing stocks came after the Commerce Department released a report showing housing starts unexpectedly increased in the month of November.
The report also showed building permits, an indicator of future housing demand, spiked much more than expected to a fourteen-year high.
Biotechnology, networking and chemical stocks also saw significant strength on the day, 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 edged up by 0.2 percent, while China’s Shanghai Composite Index jumped by 1.1 percent.
Meanwhile, the major European markets turned mixed over the course of the session. While the U.K.’s FTSE 100 Index fell by 0.3 percent, the French CAC 40 Index closed just above the unchanged line and the German DAX Index advanced by 0.8 percent.
In the bond market, treasuries moved modestly lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point at 0.930 percent.
Developments in Washington are likely to remain in the spotlight on Friday, overshadowing a report on leading economic indicators.
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