[10/8/20]Stocks ended higher Thursday as Wall Street parsed mixed signals about a stimulus package from House Speaker Nancy Pelosi and President Donald Trump.
Pelosi told Treasury Secretary Steven Mnuchin she wouldn’t agree to a stand-alone relief bill for airlines without a guarantee they would address a more comprehensive package.
“They just want money for the president to spend money on who knows what?” Pelosi said at a news conference Thursday. “There is no stand-alone bill without a bigger bill.”
Meanwhile, Trump, who recently told his staff to halt the stimulus talks till after the election, said Thursday that negotiators were making headway.
“I shut down talks two days ago because they weren’t working out. Now they are starting to work out,” Trump said during an interview on the Fox Business Channel.
The Dow Jones Industrial Average finished up 122 points, or 0.43%, to 28,425, the S&P 500 gained 0.8% and the Nasdaq rose 0.5%.
Wall Street had been feeling optimistic that lawmakers could secure further fiscal stimulus for the U.S. economy, even if it comes in the form of smaller relief bills.
Trump told Fox Business that stimulus talks, which he declared over earlier this week, were showing progress, and could include support beyond the airline sector.
“A compromise on a big stimulus package in Washington could potentially deliver another October surprise, but the odds are against it as Election Day approaches,” said LPL Financial equity strategist Jeffrey Buchbinder.
“The optics of getting nothing done aren’t great on either side, and there are a lot of close Senate races right now, suggesting there still may be a glimmer of hope for a deal by Nov. 3.”
“Even though there is uncertainty now about the fiscal stimulus negotiations, regardless of who wins the election, we are likely to have additional fiscal stimulus,” said Nancy Davis, founder of Quadratic Capital and portfolio manager of the Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL) – Get Report.
Morgan Stanley’s (MS) – Get Report agreement to acquire Eaton Vance (EV) – Get Report for $7 billion boosted sentiment.
International Business Machines (IBM) – Get Report rose after the computer giant said it would spin off its infrastructure division, helping IBM concentrate its focus on hybrid cloud growth.
Shares of Regeneron Pharmaceuticals (REGN) – Get Report rose Thursday after praised its coronavirus antibody treatment and the drugmaker said it would seek emergency use authorization from the Food and Drug Administration.
Stocks had finished sharply higher Wednesday after Trump said he would consider alternative aid measures such as a new round of stimulus checks, the Paycheck Protection Program and support for airlines.
Jobless claims in the U.S. remain elevated, with the latest weekly data showing an additional 840,000 Americans filed for first-time unemployment benefits.
