US stocks ended solidly higher on Thursday and the S&P 500 and Nasdaq posted record closing highs after another batch of upbeat earnings and data suggesting the labor market may be stabilising.
The Dow and S&P 500 rose for a fourth straight day, with investor hopes of further progress on a pandemic-relief package also boosting the market. Democrats in the US Senate were poised on Thursday to take a first step toward the ultimate passage of President Joe Biden’s $1.9 trillion COVID-19 relief proposal.
The number of Americans filing new applications for unemployment benefits decreased further last week, according to the Labor Department’s report.
“There’s news around the vaccines, the economic data is a little bit better, earnings have been pretty good across the board and there’s still talk of a $1.9 trillion stimulus package. So all of those things are good for Wall Street, and that’s why we’re seeing the market continue to rally,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.
Stronger-than-expected results so far in the fourth quarter have driven up analysts’ expectations, and S&P 500 companies are now on track to post earnings growth for the quarter instead of a decline as initially expected.
A pandemic-driven surge in online shopping during the holiday season helped e-commerce firm eBay Inc and payment platform PayPal Holdings Inc top quarterly earnings estimates.
Unofficially, the Dow Jones Industrial Average rose 332.2 points, or 1.08%, to 31,055.8, the S&P 500 gained 41.57 points, or 1.09%, to 3,871.74 and the Nasdaq Composite added 167.20 points, or 1.23%, to 13,777.74.
The major indexes have bounced back sharply this week also as a recent buying frenzy driven by social media appeared to stall following a bout of market volatility last week.
Shares of videogame retailer GameStop Corp and other recent favorites of retail investors fell again on Thursday.
US Treasury Secretary Janet Yellen has said that she and financial market regulators needed to “understand deeply” what happened in the recent retail trading frenzy before taking any action.
Investors will be watching closely the US government’s monthly employment report due out Friday.
According to a Reuters poll of economists, payrolls likely increased by 50 000 jobs in January after declining by 140 000 in December.