Dow climbs as value stocks overshadow stimulus uncertainty

Published On: October 9, 2020Categories: Stocks & Shares2.1 min read

The Dow Jones Industrial Average gained 0.43%, the S&P 500 added 0.81%, while the Nasdaq Composite was up  0.50%

The Dow climbed Thursday, led by strength in value stocks even as investors mulled the chances of further stimulus after U.S. House Speaker Nancy Pelosi rejected the idea of passing standalone aid bills.

The Dow Jones Industrial Average rose 0.43%, or 122 points. The S&P 500 was up 0.81%, while the Nasdaq Composite added 0.50%.

There is not going to be any stand-alone bill unless there is a bigger bill and it can be part of that, or it could be in addition to it, Pelosi said, though added that talks were ongoing. Earlier this week, Trump said he was ready to sign off on standalone stimulus bills, including support for individuals, small businesses and airlines.

Senate Majority Leader Mitch McConnell, meanwhile, reportedly said a big portion of Republican senators were wary of rolling out further stimulus.

Airlines initially dropped on the news, but pared some losses.

Delta Air Line, United Airlines Holdings, and American Airlines Group ended higher. American Airlines told CNBC it would be forced to terminate service to additional U.S. markets without additional aid from Congress.

Stocks tied to the economy continued to trend above the flatline, with financials, industrials and energy higher.

Energy led the broader market higher, underpinned by rising oil prices amid hurricane-related disruptions in the U.S. Gulf of Mexico and positive comments from OPEC on long-term oil demand.

OPEC forecasts global oil demand will surpass the pre-pandemic levels in 2022 and grow steadily until the late 2030s, when it will begin to plateau.

Big tech, meanwhile, gave up some gains to trade mixed.  Microsoft, Facebook, and Alphabet closed above the flatline, while, Apple ended in the red.

Elsewhere in tech, International Business Machines jumped nearly 6% after saying it would spin off its managed infrastructure services business into a separate public company. The move comes as ‘Big Blue’ seeks to ramp-up its hybrid cloud growth.

IBM is essentially getting rid of a shrinking, low margin operation given the cannibalizing impact of automation and cloud, masking stronger growth for the rest of the operation, Wedbush said, though added that IBM’s medium-term growth forecasts appeared “aggressive.”

Tesla cut gains into the close following a rally earlier after New Street upgraded the stock to buy from neutral, with a Street-high price target of $578.

On the economic front, the Labor Department said 840,000 people filed for unemployment support for the first time in the week ended October 3, down 9,000 from the prior week’s upwardly revised 849,000, and above economists’ estimate of 820,000.

In merger news, Morgan Stanley said it would acquire Eaton Vance for $7 billion in a bid to expand its push into money management.

About the Author: Jonathan Adams

Latest articles

Go to Top