Dow hovers around records with Biden to outline more financial aid late Thursday


U.S. stock benchmarks traded higher Thursday noon, with the Dow touching an intraday record, as investors focused on the prospects of further financial aid from the government to combat the impact of the coronavirus pandemic, with President-elect Joe Biden set to lay out details of his plan Thursday evening.

A report showing weekly jobless benefit claims rising to the highest level since last August, as business lockdowns were imposed again in some states to combat the coronavirus pandemic, suggests economic growth is stalling as 2021 begins, analysts noted .

What are major benchmarks doing?
  • The Dow Jones Industrial Average
    rose 113 points, or 0.4%, to 31,174, touching an intraday record at 31,223.78.

  • The S&P 500 index
    was trading 6 points, or 0.2%, higher at 3,816.

  • The Nasdaq Composite Index
    was climbing 55 points, or 0.4%, at 13,184 and saw a new intraday high.

The Dow
fell less than 0.1% Wednesday just ahead of a House vote to impeach President Donald Trump for inciting the Jan. 6 Capitol riot, while the S&P 500
and Nasdaq Composite
ended slightly higher.

What’s driving the market?

President-elect Joe Biden will announce his coronavirus relief plan on Thursday evening, in what is billed as a sweeping measure expected to include items including cash payments to Americans and money for distributing COVID-19 vaccines as well as said for states and local authorities.

Biden plans to detail his proposals in Wilmington, Del., at 7:15 p.m. Eastern, less than a week before being inaugurated as president, and a day after the House of Representatives voted to impeach President Donald Trump for a historic second time.

“Policymakers are going to have to build a bridge to help those less fortunate so we can get to those more normal time periods,” said Larry Adam, chief investment officer at Raymond James, in an interview.

Talk of additional federal spending comes as a report on U.S. weekly jobless benefit claims in early January were the highest since last August, rising by 181,000 to 965,000 as the COVID-19 pandemic has caused renewed lockdowns across the country, the Labor Department reported Thursday. Economists on average had estimated that claims would come in at 800,000.

The U.S. added at least 230,476 new cases on Wednesday according to a New York Times tracker , and counted at least 3,922 deaths, after setting a record of more than 4,400 on Tuesday, the most in a single day since the start of the outbreak.

The higher jobless benefit claims figures for early January, however, may help bolster the argument among those who make the case that the economy needs more fiscal help as the virus stages a fresh spread.

“At a certain point tough jobs numbers like we saw this morning can serve as the tinder for those calling for a correction, but the market’s view seems to be that the light at the end of the tunnel remains in sight, despite a plodding vaccination rollout,” wrote Mike Loewengart, investment strategist at E-Trade Financial, in emailed comments.

“Further, a bleaker than excepted jobs report translates into a greater likelihood for a full-throated stimulus package, which perversely acts as a tailwind for the market,” he said.

Optimism for new aid has supported bullish predictions for the market’s performance in 2021. Indeed, Goldman Sachs’ David Kostin projects that the S&P 500 will end 2021 at 4,300.

Meanwhile, investors will also be keeping an eye on bond yields, which ticked higher last week and early this week in a move blamed on worries that another fiscal package could fuel inflation.

“Bond yields are rising for the right reasons. Investors are anticipating an improvement in economic data,” said Adam.

In other economic news, U.S. import price index rises 0.9% in December, and 0.4% in December, excluding fuel prices.

Investors are also paying close attention to a speech by Fed Chairman Jerome Powell around noon.

Which companies are in focus?
  • BlackRock Inc.
    shares fell 3.5% , after the asset manager, with $8.7 trillion in assets under management, reported fourth-quarter profit and revenue that beat expectations.

  • Shars of Tesla Inc.
    were 0.1% lower. The National Highway Traffic Safety Administration sent a letter to the electric-vehicle maker seeking a voluntary recall of 158,000 Model X units from the 2016, 2017 and 2018 model years over a possible defect impacting safety functions including rear-view-camera operation.

  • Google parent Alphabet Inc. shares

    may be in focus after the company said it completed the acquisition of fitness-tracking company Fitbit. Alphabet’s Class A and C shares were down 0.9%.

  • Cisco Systems’
    stock was in focus after CNBC reported that it was proposing a higher bit for Acacia Communications
    Cisco shares were up 0.4%, while Acacia’s stock surged 32%.

  • Shares of Virgin Galactic
     jumped over 15% after ARK Investment Management filed with the Securities and Exchange Commission to launch a space exploration exchange-traded fund.

How are other assets trading?
  • The yield on the 10-year U.S. Treasury note
     was up 1 basis point around 1.10%.

  • The ICE U.S. Dollar Index
    a gauge of the currency against a basket of six major rivals, was down 0.1%.

  • Oil futures were trading higher, with the U.S. benchmark
     0.1% up at $52.92 per barrel. Gold futures
    were trading 0.4% lower at $1,848 an ounce.

  • The pan-European Stoxx 600 index
     rose 0.7%, while London’s FTSE 100 
    gained 0.8%.

  • In Asia, the Shanghai Composite
    closed 0.9% lower, while Hong Kong’s Hang Seng Index
    climbed 0.9% and Japan’s Nikkei 225 index
     gained 0.9%


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