Stocks pared earlier gains and finished Thursday’s session slightly higher as hopes for further fiscal stimulus waned.
The Dow Jones Industrial Average rose 35.20 points, or 0.1%, to 27,816.90 after jumping 250 points earlier in the day. The S&P 500 rose 0.5%, or 17.80 points, to 3,380.80, while the Nasdaq Composite outperformed, gaining 1.4%, or 159.00 points, to 11,326.51.
The 30-stock benchmark and the S&P 500 briefly turned negative after House Majority Leader Steny Hoyer’s office sent out a notice that the House was expected to vote on the Democrats’ stimulus bill Thursday. Traders were hoping lawmakers would keep delaying that vote in a sign that progress was being made with Republicans on a bipartisan package.
The market was supported by hopes that despite the public jockeying back and forth, lawmakers would eventually work a bill out. Tech shares, which could do well even without another stimulus, provided the broader market with some support as well as Amazon, Microsoft, Alphabet and Facebook all jumped at least 1%. Netflix popped 5.5%.
The House, which aimed to pass a $2.2 trillion Democratic bill Wednesday night, had delayed a vote to allow more time for House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin to hash out a bipartisan plan.
Pelosi and Mnuchin held a phone call Thursday after they failed to strike a deal during a Wednesday meeting.
“The two discussed further clarifications on amounts and language but distance on key areas remain. Their conversation will continue this afternoon,” a Pelosi spokesperson said, referring to the phone call.
Earlier Thursday, Pelosi said she is “hoping” the House will vote on its stimulus bill Thursday. While she acknowledged Democrats and Republicans are “way off” on issues including state and municipal aid, the speaker did not rule out the possibility of an agreement.
“Investors eagerly watched for the white smoke signal in Washington,” Adam Crisafulli, founder of Vital Knowledge, said in a note Thursday. “No white smoke was seen and if anything, the tone from both sides turned more acrimonious in the afternoon.”
Mixed economic data also kept sentiment in check. U.S. manufacturing activity slowed in September as a purchasing manager’s index fell to a reading of 55.4 from 56 in August, according to the Institute for Supply Management.
The weekly jobless claims report came in better than expected, however. The Labor Department said first-time filers for unemployment benefits tallied 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.
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