S&P 500, Nasdaq at record highs as stimulus bets offset higher jobless claims

(Reuters) -Technology shares pushed the S&P 500 and the Nasdaq to record highs on Thursday as optimism grew over a coronavirus stimulus bill, helping markets look past signs of economic strain brought on by the COVID-19 pandemic.

FILE PHOTO: A statue of George Washington stands as Federal Hall across Wall Street from the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

Technology stocks were among the best performing S&P sectors and hit a record high as their perceived resilience through the virus outbreak drove increased buying.

Consumer discretionary stocks, a sector primed to benefit from fresh stimulus also hit a record high, while utilities and materials shares marked large gains.

Top Republicans and Democrats were closer than ever to producing a fresh round of aid in response to a crisis that has killed more than 304,000 Americans and thrown millions out of work.

Many market participants saw the passing of new measures to support the economy as imminent, after data showed the number of Americans filing first-time claims for jobless benefits unexpectedly rose last week.

This followed a reading on Wednesday that showed U.S. retail sales fell more than expected in November, as consumer spending remained constrained.

“It’s all about stimulus today and expectations of a pathway to the deal … the market has been waiting for a deal for a while and whether it’ll be a good Christmas surprise remains to be seen,” said Ryan Giannotto, director of research at GraniteShares in New York City.

At 12:03 p.m. ET, the Dow Jones Industrial Average was up 113.92 points, or 0.38%, at 30,268.46, the S&P 500 was up 15.32 points, or 0.41%, at 3,716.49. The Nasdaq Composite was up 64.32 points, or 0.51%, at 12,722.51.

The Federal Reserve also kept interest rates at near-zero levels on Wednesday and vowed to keep funneling cash into financial markets over the long term. Equity markets have been among the main beneficiaries of accommodative policy through the pandemic.

“We also have the Federal Reserve buying almost a trillion and a half dollars worth of assets a year and they have promised to keep interest rates at zero for the next three years and that is also where the optimism comes from,” said Mike O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

Among individual movers, General Mills Inc rose 0.9% after it beat second-quarter profit estimates, boosted by sales of its pet foods and baking products.

Outsourcing services provider Accenture rose 8.6% after it raised its annual sales forecast and beat quarterly revenue estimates as an extended work-from-home period boosted its digital, cloud and security services.

Advancing issues outnumbered decliners for a 1.79-to-1 ratio on the NYSE and a 1.53-to-1 ratio on the Nasdaq.

The S&P index recorded 32 new 52-week highs and no new low, while the Nasdaq recorded 204 new highs and eight new lows.

Source: Read Full Article