U.S. stocks kicked off early Thursday trade slightly higher, as investors parsed a larger-than-expected drop in first-time weekly jobless claims and a stream of corporate earnings reports as talks over a fiscal stimulus package drag on.
What are major benchmarks doing?
The Dow Jones Industrial Average DJIA, +0.14% picked up 20 points, or 0.1%, to 28,229, while S&P 500 futures SPX, +0.19% gained 7 points, or 0.2%, to reach around 3,444. The Nasdaq Composite Index COMP, +0.12% SPX, +0.19%, meanwhile, advanced 51 points, or 0.4%, to 11,534.
The Dow DJIA, +0.14% on Wednesday ended a topsy-turvy session with a loss of 97.97 points, or 0.3%, at 28,210.82, while the S&P 500 SPX, +0.19% dropped 7.56 points, or 0.2%, to close at 3,435.56. The Nasdaq Composite COMP, +0.12% Index finished at 11,484.94, down 31.80 points, or 0.3%.
What’s driving the market?
Long-running fiscal stimulus talks have captivated investors over the past few weeks, sparking debate over whether the economic recovery would lose momentum in the fourth quarter without another round of aid from Washington.
Negotiations between House Democrats and the Trump administration on a deal have been seen making progress, with President Donald Trump pushing for a large deal, but Senate Republicans have resisted calls for a $1.9 trillion-plus package. On Wednesday, both House Democrats and the White House were playing down prospects for a deal before Election Day on Nov. 3, while planning to continue talks.
“The back and forth between the Democrats and the Republicans seems to be never-ending and traders are getting sick of the negotiations dragging on,” said David Madden, market analyst at CMC Markets UK, in a note. “The mood is a little downbeat because all the while that U.S. politicians are squabbling, the health crisis is getting worse. ”
Traders, however, aren’t “cutting and running” on expectations a deal will come eventually, he said.
In the U.S., the seven-day moving average of new cases was 59,527 as of Tuesday, while the 14-day average was 55,282, The Wall Street Journal reported, citing an analysis of data compiled by Johns Hopkins. When the seven-day average tops the 14-day, it indicates cases are on the rise.
Analysts said renewed jitters over the presidential election could also make investors more reluctant to embrace risky assets in the near term. The U.S. on Wednesday accused Iran of interfering in the election, blaming the country for threatening emails to registered Democratic voters in battle ground states, while also saying that Russia had obtained voter registration data.
Trump and Democratic challenger Joe Biden face off for a second and final televised debate Thursday night. Biden continues to lead Trump in nationwide polls but has seen his advantage shrink somewhat in recent days.
Earnings reporting season also remains in full swing, as investors digested results from a number of closely followed companies, including electric-vehicle maker Tesla Inc. TSLA, +2.09%.
In U.S. economic news, first-time applications for weekly jobless benefits fell to 787,000 last week, the Labor Department reported Thursday. Economists surveyed by MarketWatch, on average, had looked for 860,000 initial claims.
Meanwhile, the Senate Judiciary Committee voted to approve Judge Amy Coney Barrett’s nomination to the Supreme Court, overcoming a decision by Democrats to boycott the vote, and setting the stage for the full Senate to vote on Monday.
In other U.S. economic reports, figures on September existing home sales and an Index of Leading Economic Indicators are both due at 10 a.m.
Which companies are in focus?
- Tesla TSLA shares were up nearly 4% after delivering quarterly earnings that beat Wall Street expectations.
- Shares of Chipotle Mexican Grill Inc. CMG, -6.08% fell over 6% on Thursday despite returning sales growth over the summer.
- CSX Corp. CSX, +4.17% shares rose 5.5% after the railroad company late Wednesday reported third-quarter results that were better than in the previous quarter.
- Shares of chip maker Xilinx Inc. XLNX, +1.53% were up over 1% after the company reported better-than-expected results after Wednesday’s closing bell.
- Dow Inc. DOW shares rose 2.7% after the materials and plastics company reported an adjusted profit and revenues that fell less than expected.
- Shares of Coca-Cola Co. KO rose 1.6% after topping earnings and revenue forecasts.
- AT&T Inc. T shares were up 5% after the telecommunications and media giant reported a third-quarter net loss that missed expectations but revenue that topped Wall Street estimates.
- American Airlines Group Inc. AAL shares were down 1.8% after a narrower-than-expected third-quarter loss and revenue that fell less than forecast.
How are other assets performing?
In global equities, the Shanghai Composite SHCOMP, -0.37% closed down 0.4%, while Hong Kong’s Hang Seng Index HSI, +0.12% gained 0.1% and Japan’s Nikkei 225 Index NIK, -0.69% retreated 0.7%. The pan-European Stoxx 600 Europe SXXP, -0.11% was trading down 0.3%, while London’s FTSE 100 UKX, -0.01% was off less than 0.1%.
The ICE U.S. Dollar Index DXY, +0.28%, a measure of the currency against a basket of six major rivals, was up 0.3%.
The yield on the 10-year Treasury note TMUBMUSD10Y, 0.826% was 1.8 basis points higher at 0.83%. Yields and bond prices move in opposite directions.