The S&P 500 and Nasdaq Composite opened at record highs on Thursday, boosted by hope of Washington coming through on additional fiscal aid before the end of 2020.
The S&P 500 gained 0.5% along with the tech-heavy Nasdaq. The Dow Jones Industrial Average climbed 135 points, or 0.5%.
Utilities and materials were the best-performing sectors in the S&P 500, rising more than 1% each. Apple rose nearly 1% to lead the Dow higher.
Congressional leaders on Wednesday closed in on a $900 stimulus package that would include direct payments to individuals.
The measure would exclude liability protections for businesses as well as aid to state and local governments, CNBC confirmed. Disagreements over those issues have been a stumbling block in the latest round of negotiations.
“We’re still close and we’re going to get there,” Senate Majority Leader Mitch McConnell, R-Ky., told reporters on Wednesday evening. Earlier in the day, he said: “We made major headway toward hammering out a targeted pandemic relief package that would be able to pass both chambers with bipartisan majorities.”
The latest round of U.S. fiscal stimulus talks comes as Covid-19 cases increase at a record pace. The U.S. is recording at least 215,729 additional Covid-19 cases each day, based on a seven-day average calculated by CNBC using Johns Hopkins University data. On Wednesday alone, more than 247,000 new infections were confirmed.
This resurgence in Covid-19 cases has led to states reimposing stricter social-distancing measures that are slowing down parts of the economy, especially the labor market.
On Thursday, data showed jobless claims totaled 885,000 last week, hitting their highest level since early September. Economists expected 808,000 workers sought state jobless benefits during the week ended Dec. 12.
“Until COVID is more under control, claims are going to continue to be elevated,” Thomas Simons, money market economist at Jefferies, wrote in a note.
Wall Street was coming off a mixed session in which the S&P 500 and Nasdaq Composite rose while the Dow posted a small loss.
On Wednesday, the Federal Reserve pledged to do its part by keeping to buy bonds until the economic recovery was completed. Fed Chairman Jerome Powell also said the central bank would increase its bond purchases if the recovery slows down.
Gregory Faranello, head of U.S. rates trading at AmeriVet Securities, said U.S. monetary policy will likely stay easy for a while.
“They feel that there still are disinflationary forces globally to contend with, and they are being realistic about their timeframe and their ability to achieve their inflation goal” of 2%, Faranello said. “This lends itself to this theme [rates] staying lower-for-longer.”
– CNBC’s Yun Li contributed reporting.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
