Wall Street set to rise on stimulus hopes as jobless claims stay elevated

Wall Street

Wall Street’s main indexes were set to rise for a second straight day on Thursday as bets of a piecemeal fiscal stimulus deal lifted sentiment, while data on weekly jobless claims showed the labor market recovery continued to sputter.

Two days after calling off negotiations on a comprehensive fiscal aid bill, U.S. President Donald Trump said some discussions were ongoing with Democrats about boosting support for U.S. airlines and providing Americans with $1,200 stimulus checks.

Shares of Delta Air Lines Inc, American Airlines Group Inc, United Airlines Holdings Inc and JetBlue Airways Corp jumped between 1.9% and 2.3% in premarket trading.

“The market’s really dependent upon (fiscal) stimulus and trying to predict what that’ll likely be,” said Tim Chubb, chief investment officer at Girard in West Chester, Pennsylvania.

“It is also getting a better understanding of how the election will turn out and what that means for the amount of fiscal stimulus.”

Doubts about more fiscal aid and signs of a slowing domestic economic rebound halted a five-month gaining streak on Wall Street in September, but U.S. stocks have since recovered, partly as investors begin to digest the prospect of Democratic presidential nominee Joe Biden winning the Nov. 3 election.

Biden appeared to lead Trump among likely voters in Florida and the two were locked in a tight race in Arizona, according to opinion polls released on Wednesday.

With less than a month left for the election, Trump said on Thursday he would not participate in a virtual presidential debate, moments after the commission that oversees the debates said the event on Oct. 15 would be conducted from remote locations in the wake of his COVID-19 diagnosis.

Meanwhile, data showed the number of Americans filing new claims for jobless benefits drifted lower last week but signaled the labor market was making little headway in getting millions of people back on the job after being out of work due to COVID-19 disruptions.

At 8:50 a.m. ET, Dow e-minis were up 193 points, or 0.68%, S&P 500 e-minis were up 21 points, or 0.62%, and Nasdaq 100 e-minis were up 93.5 points, or 0.82%.

In company news, Coty Inc jumped 6.9% after the cosmetics maker announced the launch of direct-to-consumer websites for Kylie Skin brand in the UK, France, Germany and Australia.

Drugmakers Regeneron Pharmaceuticals Inc and Eli Lilly & Co gained 4.0% and 2.0%, respectively, after Trump praised their COVID-19 medications and said he will make them free for Americans to use.

International Business Machines Corp surged 9.5% after saying it was splitting itself into two public companies, capping a years-long effort by the world’s first big computing firm to diversify away from its legacy businesses to focus on high-margin cloud computing.

Eaton Vance Corp surged 47% after Morgan Stanley agreed to buy the asset management firm for about $7 billion in a cash-and-stock deal. Shares of Morgan Stanley fell 1.7%.

With the third-quarter earnings season kicking off next week, analysts expect earnings at S&P 500 companies to have dropped about 21% in the quarter from a year ago, according to IBES data from Refinitiv.

Was it worth reading? Let us know.