US close: Stocks continue rally following surprise jobless figures
Wall Street stocks closed higher on Thursday after this week's initial jobless claims report revealed a surprise decline to their lowest level since the onset of the pandemic and a tech rally late in the session gave indices a boost.
At the close, the Dow Jones Industrial Average was up 0.68% at 27,386.98, while the S&P 500 was 0.64% firmer at 3,349.16 and the Nasdaq Composite saw out the session 1.00% stronger at 11,108.07.
The Dow closed 185.46 points higher on Thursday, continuing on the upward trajectory seen in the previous session as investors thumbed through a slew of data and earnings releases.
Market participants were reading over some new jobless claims figures from the Labor Department that revealed jobless claims in America unexpectedly broke significantly lower last week. Initial unemployment claims for the week ending on 1 August fell by 249,000 to 1.18m, while secondary unemployment claims also decreased - down 844,000 to 16.1m.
Gains were initially capped as traders were still keeping a keen eye on Washington for clues regarding the next Covid-19 stimulus package. While the Trump administration appeared to make a slight compromise on its opposition to continued federal support for unemployment benefits, offering to extend extra federal unemployment insurance at $400 per week until December, the two parties have still been unable to reach a final deal.
Senate majority leader Mitch McConnell said lawmakers were still at odds over how much stimulus was appropriate, while House Speaker Nancy Pelosi took aim at Republicans in another interview.
Elsewhere, Johns Hopkins reported 52,800 new US cases Covid-19 cases on Wednesday, down 25.4% from the 70,800 recorded at the same time a week ago.
"This looks great, but the rate of decline probably is substantially overstated, because the number of new tests yesterday fell by 20.3% compared to a week ago, the seventh straight decline," said Pantheon Macroeconomics' Ian Shepherdson.
However, despite unresolved tensions on the Hill, tech stocks rallied later in the session, with Facebook, Apple, Netflix, Amazon and Microsoft all closing higher.
Back on the macro calendar, US employers made another 262,649 job cuts in July as the Covid-19 pandemic continued to weigh on demand - another indication that the labour market recovery could now be slowing down. Layoffs reported by global Challenger, Gray and Christmas were 54% higher month-on-month - the third-largest monthly total since the coronavirus pandemic began.