U.S. stocks climbed on Thursday, but only after pinballing through another shaky day of trading, as Wall Street waits to see if Washington can get past its partisanship to deliver another economic rescue package.
The S&P 500 ended the day 17.80 points higher, or 0.5%, at 3,380.80, but it careened from an early 1% gain to a slight loss before arriving there.
The Dow Jones industrial average rose 35.20 points, or 0.1%, to 27,816.90 after earlier bouncing between a gain of 259 points and a loss of 112. The Nasdaq composite rose a healthier 159.00 points or 1.4%, to 11,326.51 as big tech-oriented stocks propped up the market, much as they have through the pandemic.
Such big swings have become typical recently, as investors handicap the chances of a deal on Capitol Hill to send more cash to Americans, restore jobless benefits for laid-off workers and deliver assistance to airlines and other industries hit particularly hard by the pandemic.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued their talks on Thursday, but no breakthrough arrived before stock trading ended on Wall Street. Instead, there were only hopes that were periodically raised and dashed as government officials took turns criticizing each other.
“The market, for lack of really anything else to trade off of, has responded to these headlines on the potential for stimulus,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.
Data reports released in the morning also painted a mixed picture on the economy, which added to the market’s sloshing around.
One indicated the pace of layoffs across the country may have slowed last week, with the number of workers filing for unemployment benefits falling to 837,000 from 873,000. It’s a larger decline than economists expected, though the number remains incredibly high compared with before the pandemic.
“We’re certainly expecting the employment situation to slowly improve,” Wren said. “Things seem to be moving in the right direction.”
Consumer spending also strengthened by more than expected in August, which is key because it’s the main driver of the U.S. economy. But other reports were more discouraging. Personal incomes weakened by more than expected last month, and growth in the country’s manufacturing sector also fell short of forecasts.
Other warning signs are looming for the economy, which has seen some slowdowns recently after the last round of stimulus approved by Congress expired. The Walt Disney Co. and other major companies have announced even more layoffs this week, and the clock is ticking on Washington to offer more support.
The CEO of American Airlines said that it would reverse the furloughs of 19,000 workers if Washington can reach a deal with $25 billion for airlines “over the next few days.” United Airlines told government leaders that it could also undo the furloughs of 13,000 workers.
United Airline’s stock gained 1.2%, and American Airlines shares rose 2.4%, but only after a turbulent day of ups and downs.
Continued strength for Big Tech stocks helped to lift the market. Amazon, Microsoft, Apple, Netflix, Facebook and Google’s parent company alone accounted for the bulk of the S&P 500’s gain.
The market’s turbulent moves were reminiscent of Wednesday’s, as well as of the last several weeks’, as rising and falling hopes for a deal on Capitol Hill have kept markets shaky.
Investors say another round of economic aid from Congress is crucial given the slowdowns already seen. Mnuchin and Pelosi have worked effectively together in the past, and they helped drive through the previous economic rescue approved by Congress in March. But the country’s partisan divide has only deepened since then, which has stymied progress. The next election is only about a month away.
The yield on the 10-year Treasury fell to 0.67% from 0.69% from late Wednesday after giving up earlier gains.
In Asian markets, trading on the Tokyo Stock Exchange was suspended due to a technical failure in its computer systems.
The Tokyo Stock Exchange said it plans for normal trading to resume on Friday. Officials said trading was halted early Thursday because rebooting the huge system after the malfunction would have caused confusion.
TSE President Koichiro Miyahara repeatedly apologized for the disruption to trading on the world’s third largest exchange, where about 70% of brokerage trading both by value and volume is by foreigners.
The outage on the exchange eclipsed Japan’s main economic news of the day, the first improvement in manufacturing sentiment in three years, despite the pandemic.
Trading in stock markets for South Korea, Hong Kong and mainland China was closed for national holidays.
In Europe, Germany’s DAX fell 0.2%, and France’s CAC 40 rose 0.4%. The FTSE 100 in London rose 0.2%.