Wall Street rises on stimulus bets as labor market rebound cools

(Reuters) – Wall Street’s main indexes rose on the first day of the fourth quarter on Thursday as investors bet on more fiscal stimulus after data showed a recovery in the labor market was slowing.

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The number of Americans filing for jobless benefits fell to 837,000 in the week ended Sept. 26, but claims could rise again over the next few weeks as businesses cut more jobs to ride out the recession.

Six of the 11 major S&P sectors were trading higher after the Trump administration proposed a new stimulus bill to House Democrats worth more than $1.5 trillion, which includes a $20 billion extension in aid for the battered airline industry.

Shares of American Airlines Group Inc AAL.O, Delta Air Lines Inc DAL.N, United Airlines Holdings Inc UAL.O and JetBlue Airways Corp JBLU.O rose between 0.1% and 1.0%.

“Today it’s all about the stimulus being passed or not,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh. Aggressive monetary and fiscal stimulus as well as a rally in tech-related stocks powered a Wall Street rebound since a coronavirus-driven crash in March. In September, the benchmark index clocked its biggest two-quarter increase since 2009 and the Nasdaq its best since 2000 with investors pouring into tech-related stocks such as Apple Inc AAPL.O and Microsoft Corp MSFT.O through July and August. Gains on Thursday were again led by the consumer discretionary sector .SPLRCD, which includes Amazon.com Inc AMZN.O, and the information technology index .SPLRCT. On the other hand, the energy index .SPNY tumbled another 2.7% after a 20% decline in the third quarter. With the presidential election now less than five weeks away, analysts have warned of higher volatility over the next few weeks. “Volatility is going to come back in a big way, as opposed to the second quarter, when we were able to just forget everything and pile money into the market,” Forrest said.

At 10:05 a.m. ET, the Dow Jones Industrial Average .DJI was up 0.11%, the S&P 500 .SPX was up 0.34% and the Nasdaq Composite .IXIC was up 1.01%.

Boeing Co BA.N rose 2.3% a day after Federal Aviation Administration Chief Steve Dickson conducted a 737 MAX test flight, a milestone for the jet to win approval to resume flying after two fatal crashes.

U.S.-listed shares of French-Italian chipmaker STMicroelectronics STM.N jumped 7.4% after it saw a sharp rise in automotive and microcontrollers demand in the third quarter, setting it on course to top its 2020 forecast.

Advancing issues outnumbered decliners about 1.6-to-1 on the NYSE and the Nasdaq.

The S&P index recorded nine new 52-week highs and no new low, while the Nasdaq recorded 41 new highs and 14 new lows.

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