US stocks have ended in positive territory on Thursday as fresh stimulus hopes buoyed investor sentiment toward the end of a session fraught with worries over mounting shutdowns and layoffs linked to spiralling COVID-19 infection rates.
All three major stock indexes got a healthy boost after Senate Minority Leader Chuck Schumer said Senate Majority Leader Mitch McConnell had agreed to revive talks to craft a new fiscal relief package.
“We’ve seen this playbook before, where investors flock to the safety of tech and growth when the economy shows signs of slowing down,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina. “But everything changes now that there’s hope of the next stimulus plan.”
“Clearly markets are bouncing on that optimism.”
Even so, spiraling COVID-19 infection rates turned investors toward market-leading growth stocks that have shown resiliency to the pandemic.
The Philadelphia SE Semiconductor index, which thrived throughout the health crisis, handily outperformed the broader market.
“In a COVID world, semis are a safer play as they’re not impacted as much due to shutdowns,” Detrick added.
The number of US workers filing new claims for unemployment benefits unexpectedly rose last week, the data painting a grim picture of increasingly elevated layoffs as spiking coronavirus cases and subsequent shutdowns continue to hobble the labour market.
Record infection numbers have prompted schools and businesses to close once again, thwarting the recovery of the world’s largest economy from the deepest recession since the Great Depression.
Unofficially, the Dow Jones Industrial Average rose 43.82 points, or 0.15 per cent, to 29,482.24, the S&P 500 gained 14.06 points, or 0.39 per cent, to 3,581.85 and the Nasdaq Composite added 103.11 points, or 0.87 per cent, to 11,904.71.
Third-quarter reporting season is nearing the finish line, with 472 of the companies in the S&P 500 having reported. Of those, 84.5 per cent have beaten consensus, according to Refinitiv data.
Macy’s Inc reported a 20 per cent plunge in quarterly same-store sales and the department store forecast a tough holiday season.
Chipmaker Nvidia Corp forecast a slight dip in data centre chip sales but the company beat quarterly revenue expectations.
L Brands Inc surged after posting better-than-expected quarterly results and a 56 per cent jump in same-store sales.
Tesla Inc shares rose for the third straight session to touch a record high, riding the wave of its pending inclusion in the S&P 500, announced on Monday.