By Yasin Ebrahim
Investing.com - The Dow, S&P 500, and Nasdaq closed at record highs on Thursday, as the growing prospect of a stimulus deal before year-end offset concerns about the recovery following a surge in jobless claims.
The Dow Jones Industrial Average rose 0.49%, or 147 points. The S&P 500 was up 0.52%, while the Nasdaq Composite rose 0.84%.
In a boost to hopes of a deal, House Speaker Nancy Pelosi said she hopes to receive the final legislative text on the deal later on Thursday.
President Donald Trump in a tweet claimed that stimulus talks were "looking very good." Earlier this week, lawmakers unveiled a new approach to the stimulus bill. Measures that have bipartisan support were grouped into a $900 billion bill, while divisive issues like liability protection as well as aid for local and state governments were excluded.
The backdrop of optimism for a stimulus helped stave off concerns about a slowdown in the jobs market.
The number of Americans filing for unemployed increased by 23,000 to a three-month high of 885,000 in the week ended Dec. 12, well above estimates for 800,000 claims.
"The labor market recovery was on a good track before this recent surge in COVID cases, which has caused a significant turn for the worse," Jefferies (NYSE:JEF) said. "This is why it is critical that Congress provide additional funding for aid to unemployed workers until the vaccine is more widely distributed."
The call from economists for Congress to agree on a stimulus deal sooner rather than later appears to have injected a sense of urgency on Capitol Hill as a relief package is expected to be agreed as soon as this week.
The broader market was led higher by materials, with Linde (NYSE:LIN) and Newmont Goldcorp (NYSE:NEM) among the biggest gainers in the sector.
On the earnings front, investors digested a slew of mostly better-than-expected earnings from General Mills , Rite Aid, and Accenture.
General Mills (NYSE:GIS) said better-than-expected second-quarter earnings per share of $1.06 was driven by sales of pet food and baking products. Its shares rose 1%.
Rite Aid (NYSE:RAD) swung to a surprise quarterly profit as growth in its retail pharmacy and pharmacy services businesses boosted revenue that topped estimated. Its shares surged 18%.
In technology, meanwhile, consulting firm Accenture (NYSE:ACN) raised its annual guidance after reporting first-quarter results that beat on both the top and bottom lines, sending its shares 7% higher.
Google's Alphabet (NASDAQ:GOOGL) fell 1% on increased regulatory concerns after the search engine giant was hit with its third antitrust lawsuit in as many as months.
A coalition of state attorneys general filed a new complaint against Google for alleged antitrust practices in online search.
Energy stocks were one of the few sectors in the red even as oil prices jumped to a nine-month high as concerns of the demand outlook persist.
In other news, Roku (NASDAQ:ROKU) climbed 1% after agreeing a deal on Wednesday with WarnerMedia to carry the HBO Max streaming service.