U.S. Stocks Close Mostly Higher As Pelosi Indicates Progress On Stimulus Deal

Stocks fluctuated over the course of the trading session on Thursday but managed to end the day mostly higher. After bouncing back and forth across the unchanged line in morning trading, the major averages largely remained positive throughout the afternoon.

The major averages all closed higher, although the Nasdaq posted a relatively modest gain, edging up 21.31 points or 0.2 percent to 11,506.01. The Dow climbed 152.84 points or 0.5 percent to 28,363.66 and the S&P 500 rose 17.93 points or 0.5 percent to 3,453.49.

The strength on Wall Street came as House Speaker Nancy Pelosi indicated Democrats and the White House continue to make progress toward an agreement on a new stimulus bill.

Pelosi told reporters the two sides are “just about there” on certain provisions but noted they have not agreed on issues such as state and local aid.

While Pelosi acknowledged it will “take a while to write the bill,” she said she believes “both sides want to reach an agreement.”

The latest comments from Pelosi came after her deputy chief of staff Drew Hammill revealed the Speaker spoke with Treasury Secretary Steven Mnuchin again on Wednesday, saying the conversation brought the two sides closer to being able to put pen to paper to write legislation.

“With the exchange of legislative language, we are better prepared to reach compromise on several priorities,” Hammill said in a post on Twitter.

He added, “Differences continue to be narrowed on health priorities, including language providing a national strategic testing and contract tracing plan, but more work needs to be done to ensure that schools are the safest places in America for children to learn.”

Upbeat U.S. economic data added to the positive, with a report from the Labor Department showing initial jobless claims came in well below economist estimates in the week ended October 17th.

The Labor Department said initial jobless claims fell to 787,000, a decrease of 55,000 from the previous week’s revised level of 842,000.

Economists had expected jobless claims to drop to 860,000 from the 898,000 originally reported for the previous week.

A separate report from the National Association of Realtors showed existing home sales spiked by much more than anticipated in the month of September.

NAR said existing home sales soared by 9.4 percent to an annual rate of 6.54 million in September after jumping by 2 percent to a revised rate of 5.98 million in August.

Economists had expected existing home sales to surge up by 5.0 percent to a rate of 6.30 million from the 6.00 million originally reported for the previous month.

Sector News

Airline stocks have moved sharply higher over the course of the session, with the NYSE Arca Airline Index soaring by 6.3 percent to its best closing level in a month.

Southwest Airlines (LUV) posted a standout gain after reporting a narrower than expected third quarter loss on revenues that exceeded analyst estimates.

Substantial strength was also visible among natural gas stocks, as reflected by the 4.7 percent spike by the NYSE Arca Natural Gas Index. The rally came despite a decrease by the price of natural gas.

Banking stocks also showed a strong move to the upside on the day, driving the KBW Bank Index up by 3.7 percent.

Oil service and oil producer stocks also saw considerable strength amid an increase by the price of crude oil, moving notably higher along with utilities, healthcare and biotechnology stocks.

On the other hand, housing stocks moved sharply lower despite the upbeat existing home sales data, dragging the Philadelphia Housing Sector Index down by 2.4 percent.

Gold stocks also came under pressure, with the NYSE Arca Gold Bugs Index slumping by 1.9 percent as the price of gold for December delivery plunged $24.90 to $1,904.60 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slid by 0.7 percent, while China’s Shanghai Composite Index fell by 0.4 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index crept up by 0.2 percent, the French CAC 40 Index and the German DAX Index both edged down by 0.1 percent.

In the bond market, treasuries came under pressure, extending the downward trend seen in recent sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.2 basis points to a four-month closing high of 0.848 percent.

Looking Ahead

The latest developments in Washington are likely to remain in focus on Friday, although traders are also likely to keep an eye on the latest earnings news.

Intel (INTC), Capital One (COF), Mattel (MAT) and Seagate Technology (STX) are among the companies releasing their quarterly results after the close of today’s trading.

American Express (AXP) and Bloomin’ Brands (BLMN) are also among the companies due to report their results before the start of trading on Friday.

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