Dow and major stock-market indexes cling to gains, after turning higher on signs that coronavirus aid talks will restart

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U.S. equity benchmarks eged higher Thursday afternoon, with investors buoyed by hopes that Washington lawmakers still could come together and pass a coronavirus aid relief package to limit the economic damage wrought by the pandemic.

Optimism around additional fiscal aid helped ease market concerns about how rising cases of COVID-19 and new social-distancing restrictions might impinge on the economic outlook.

What are major benchmarks doing?

The Dow Jones Industrial Average DJIA, +0.03% was up 11 points, around 29,442, while the S&P 500 index SPX, +0.30% was up about 9 points, or 0.3%, at 3,577. The Nasdaq Composite Index COMP, +0.79% advanced 92 points, or 0.8%, to trade at around 11,893, with all three benchmarks well off their early lows.

Stocks fell for a second day Wednesday, extending losses in late trade after New York City moved to close public schools due to rising infection rates.

What’s driving the market?

Equities were modestly higher in afternoon trade following talk of revived stimulus negotiations, even as investors contended with a continued surge in COVID-19 infections.

Senate Minority Leader Chuck Schumer, D-NY., said Mitch McConnell, R-Ky., had agreed to restart negotiations over a new coronavirus aid relief package. Up to now, Republicans and Democrats were disputing the size and scope of a potential aid bill.

The breakthrough gave a lift to stocks in the afternoon. But investors remained cautious, edging back into large-capitalization technology-rated stocks that have thrived from work-from-home arrangements.

The choppy trade on Wall Street comes as strategists and investors weigh positive developments toward a COVID-19 vaccine and its likely impact on the future of the U.S. economic recovery.

“The death toll in the United States from COVID-19 has now surpassed 250,000, but what really shook Wall Street on Wednesday was news from closer to home,” said Raffi Boyadjian, senior investment analyst at XM, in a note, referring to the decision to close New York City public schools beginning Thursday.

New York City announced the closure of all public schools after the city’s positivity rate from virus tests reached a seven-day average of 3%—the threshold set to keep schools open.

“Concerns about the health crisis and the lockdowns is the main theme of the session,” wrote David Madden, market analyst at CMC Markets UK.  

“Other states, counties and cities across America also tightened their virus curbs as infections are rising uncontrollably, showing no sign of plateauing and overwhelming health services,” Boyadjian noted.

“This isn’t the trajectory we want to see, and it underscores the fact that lockdowns kicking in across the country have a very real and negative effect on the labor market,” wrote Mike Loewengart, managing director of investment strategy at E-Trade Financial in emailed remarks.

On Wednesday, the U.S. recorded 172,391 new cases and at least 1,923 deaths, according to New York Times data. That lifted the daily average over the past week to 162,816, up 77% from two weeks ago. The number of U.S. deaths stood at 250,548 as of Wednesday.

See: ‘Depressed, disheartened and tired to the bone’: Coronavirus overwhelms U.S. hospitals

Meanwhile, progress continues toward a vaccine. Pfizer Inc. PFE, -0.33% and BioNTech SE BNTX, +4.81% on Wednesday said their vaccine candidate was 95% effective, according to a final analysis of clinical trial data. Moderna Inc. MRNA, +5.31% on Monday said its vaccine candidate was 94.5% effective. Both are expected to apply for U.S. regulatory authorization within days.

On Thursday, British drugmaker AstraZeneca PLC AZN, -0.67% AZN, +0.09% said the experimental vaccine it is developing with the University of Oxford showed a robust immune response in older adults, based on data from mid-stage trials.

“Traders haven’t forgotten about the hopeful news from Moderna and Pfizer-BioNTech with respect to vaccines but concerns about damage being done to the economy is in focus today,” Madden wrote.

On the data front, U.S. applications for state unemployment benefits rose in mid-November for the first time in more than a month, pointing to added stress on the economy from a record increase in coronavirus cases.

Initial jobless claims increased by a seasonally adjusted 31,000 to 742,000 in the seven days ended Nov. 14. Economists polled by MarketWatch had forecast initial jobless claims to total 710,000.

“The first jump in jobless claims in weeks puts into perspective where we stand on the stimulus front—which is pretty much nowhere as of now,” Loewengart said, referring to continued hopes for fiscal relief to help businesses and workers who have been financially harmed by the pandemic.

Separately, a report on manufacturing activity in the Philadelphia area showed a fall of 6 points to 26.3 in November.

An update on leading economic indicators rose 0.7% last month, the Conference Board said Thursday, following an increase of 0.7% in September and 1.6% in August. And U.S. existing home sales increased 4.3% to 6.85 million rate in October.

Which companies are in focus?
  • Shares of Sonos Inc. SONO, +28.78% jumped more than 29% after the maker of speakers and audio equipment topped sales expectations for the September quarter.
  • Nvidia Corp. NVDA, +0.00% shares were up 0.3%, despite quarterly results that blew past estimates, with sales topping $4 billion for the first time as the chip maker rolled out new gaming cards and data-center demand remained strong.
  • Macy’s Inc. M, +2.50% shares reversed a more than 7% decline to rise 1.7%, even as the department-store chain reported results that showed a swing to a smaller-than-expected loss and revenues that beat expectations.
  • Nasdaq Inc. NDAQ, +1.89%  announced Thursday a deal to buy privately held anti-financial crime management company Verafin for $2.75 billion in cash. Shares rose over 2%.
How are other assets faring?

The pan-European Stoxx 600 index SXXP, -0.75%  closed 0.6% lower, while the U.K.’s FTSE 100 index UKX, -0.79% booked a 0.8% decline. In Asian markets, China’s Shanghai Composite Index SHCOMP, +0.47% closed 0.5% higher, the CSI 300 000300, +0.74% finished up 0.7%, while Hong Kong’s Hang Seng HSI, -0.70% booked a 0.7% loss. Japan’s Nikkei 225 index NIK, -0.36% closed 0.4% lower.

The yield on the 10-year Treasury note TMUBMUSD10Y, 0.853%  fell 3 basis points to around 0.85%. Yields and prices move in opposite directions.

The ICE U.S. Dollar Index DXY, -0.03%, a gauge of the greenback’s strength against its major rivals, was flat.

Crude-oil futures CL.1, +0.26%  pulled back, falling 0.2% after notching their highest settlement since September on vaccine optimism, to settle at $41.74 a barrel. Meanwhile, gold futures GOLD, -1.73%  fell $12.40, or 0.7%, to settle at $1,861.50 an ounce, its third straight loss.

-With reporting from William Watts

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