(Reuters) – Major Wall Street indices approached all-time highs on Thursday as investors were counting on greater relief from the pandemic and rapid launch of vaccines under the Biden administration to support the economy after data showed a weakening of the labor market recovery.
The number of Americans filing new jobless claims dropped to 900,000 last week, but still remained stubbornly high as the COVID-19 pandemic tore the nation apart, increasing the risk of the economy leaving work for the second consecutive month in January.
“It’s still the knowledge that the disappointment with work won’t go away anytime soon and that we’re not out of the woods from economics, ”said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina.
At 11:53 am ET, the Dow Jones Industrial Average fell 15.14 points, or 0.05%, to 31,173.24 and the S&P 500 gained 1.89 points, or 0.05%, to 3,853.74 .
The Nasdaq Composite gained 64.99 points, or 0.48%, to 13,522.24, propelled by a rise in tech heavyweight shares of Alphabet Inc, Apple Inc and Amazon.com Inc ahead of their earnings reports in the coming weeks.
It follows Wednesday’s Netflix Inc results which revitalized “home” beneficiaries, adding $ 262 billion of combined market capitalization to the FAANG group of shares.
In a turnaround earlier this month, the Russell 1000 growth index, which includes mega-cap tech stocks, is far outpacing the Russell 1000 value index this week.
“Investors will realize that the tech names are still where impressive earnings growth is coming from and those stocks could hold up well because they have underperformed for the past couple of months, ”Detrick added.
President Joe Biden is expected to launch a number of initiatives during his early days in office, including stepping up testing and launching vaccines.
Democrats took over the US Senate on Wednesday, and Republicans in Congress signaled willingness to work on Biden’s $ 1.9 trillion stimulus plan that would increase jobless benefits and provide direct allowances to families.
Communications services, consumer discretionary and technology were the only S&P sectors in green.
Energy, financial and industrial stocks, which helped the S&P 500 rise 14% since the November 3 presidential election, fell between 0.7% and 2.6%.
With valuations close to 20-year highs, corporate results could be an important test to see if the equity market rally has advanced from fundamentals.
Earnings of S&P 500 companies are expected to rise 24% in 2021, after falling 15% in 2020, according to Refinitiv data as of January 15.
United Airlines Holdings Inc fell 7% after posting a fourth consecutive quarterly loss due to the COVID-19 pandemic, but said it aims to cut about $ 2 billion in annual costs through 2023.
Ford Motor Co was up 9% extending earnings for a second consecutive day after Deutsche Bank raised its price target on the US automaker’s stock.
Falling issuances outpaced promoters by a 1.6 to 1 ratio on the NYSE and a 1.6 to 1 ratio on the Nasdaq.
The S&P 500 made 18 new 52-week highs and no new lows, while the Nasdaq made 270 new highs and eight new lows.
Reportage by Devik Jain and Medha Singh in Bengaluru; editing by Uttaresh.V and Maju Samuel