U.S. stocks climbed on Thursday to kick off a new month and quarter as investors hoped for more fiscal stimulus to combat the coronavirus recession.
The Dow Jones Industrial Average jumped 130 points, or 0.5%, while the S&P 500 gained 0.7% and the Nasdaq Composite rose 1%.
Major technology shares led Thursday’s strong gains with Amazon, Microsoft, Alphabet, Apple and Facebook rising at least 1% each. The S&P 500 tech sector was the biggest winner among the 11 groupings, jumping 1.4%.
The House of Representatives delayed a vote on the Democrats’ $2.2 trillion rescue package on Wednesday evening to allow for more talks, which some saw as a sign that a deal can still be reached.
White House chief of staff Mark Meadows told reporters late Wednesday that President Donald Trump has extended an offer for more than $1.5 trillion in stimulus. No further details were given on the exact figure except that anything around $2 trillion and above would be a “real problem.”
Meadows comments came after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to strike a coronavirus aid deal in a meeting Wednesday afternoon. However the pair said the conversation would continue.
“We have always maintained a glimmer of hope – especially as we continue to believe there is majority support for a package in the $1.5-$2 trillion range,” wrote Ed Mills of Raymond James. “However, all of our conversations with our DC contacts remain skeptical.”
Sentiment was lifted by better-than-expected weekly jobless claims report. The Labor Department said first-time filers for unemployment benefits came in at 837,000 in the week ending Sept. 26. Economists polled by Dow Jones expected a total of 850,000.
The major averages are coming off their first down month since March. The 30-stock Dow lost 2.2% in September, a typically weak month for equities. The S&P 500 fell 3.9% for the month, while the technology-heavy Nasdaq Composite dropped 5.2%.
However, all three benchmarks achieved strong gains for the third quarter. The S&P 500 rose 8.5% in the quarter for its sixth positive quarter in seven and the index is up 5% for the year.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
