By Chuck Mikolajczak and Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - Shares on Wall Street shrugged off a sluggish start and closed higher on Thursday, with the Nasdaq ending the session above 11,000 for the first time as investors hoped for a new fiscal stimulus package.
Tech and tech-related heavyweight stocks such as Apple (O:AAPL) and Facebook (NASDAQ:FB) <.FB.O> helped pace gains on the indexes. The tech-heavy Nasdaq clinched a new record high in early trading, and closed above the 11,000-mark for the first time after initially climbing above it on Wednesday.
The benchmark S&P 500 and blue-chip Dow were about 1% and 7% away from their own peaks scaled in February.
"Markets have been incredibly resilient, there is a big fear of missing out and it is the old stalwarts, the technology leaders that keep driving the market higher," said Sal Bruno, chief investment officer at IndexIQ in New York.
Economic data released on Thursday painted a mixed picture as U.S. Labor Department numbers showed a first fall in jobless claims in three weeks, although a separate report showed a 54% surge in job cuts announced by employers in July. The data comes ahead of the government payrolls report on Friday.
Investors are looking to the next fiscal aid package to further cope with fallout from the COVID-19 pandemic. But Senate Majority Leader Mitch McConnell said on Thursday Republicans and Democrats remained far apart over what to include in another wave of relief.
Senate Republicans have been told that negotiators have until Friday to reach agreement. "If there's not a deal by Friday, there won't be a deal," Republican Senator Roy Blunt told reporters on Wednesday.
"I’m not sure people are taking the drop dead date seriously because most people probably view that as a negotiating ploy and people realize the government is going to have to do something," said Bruno.
Unofficially, the Dow Jones Industrial Average (DJI) rose 185.66 points, or 0.68%, to 27,387.18, the S&P 500 (SPX) gained 21.39 points, or 0.64%, to 3,349.16 and the Nasdaq Composite (IXIC) added 109.67 points, or 1%, to 11,108.07.
Ahead of the deadline for a new stimulus package, the focus now shifts to July jobs report Friday morning, with analysts forecasting a rise of 1.58 million new jobs last month and a decline in the unemployment rate to 10.5%.
As major averages continue to rally off their March lows, powered by heaps of fiscal and monetary stimulus and better-than-feared second-quarter earnings, the Dow and S&P notched their fifth straight daily gain, with the Nasdaq climbing for a seventh consecutive session.
The corporate results season is now in its final stretch, with about 424 S&P 500 firms having reported so far. Earnings have been about 22.5% above analyst expectations, according to IBES Refinitiv data, the highest on record since 1994.
Communication services (SPLRCL) and technology (SPLRCT) were the best performing of the 11 major S&P sectors on the day.
Among individual shares, Becton Dickinson and Co (N:BDX) dropped after posting quarterly revenue below estimates as delayed elective procedures during coronavirus-led lockdowns squeezed demand for some of its devices.
Western Digital (O:WDC) sank after the hard drive maker reported weaker-than-expected fourth-quarter revenue and forecast a soft current quarter.
Bristol-Myers Squibb Co (N:BMY) gained after the drugmaker raised its annual profit forecast on hopes of a recovery in demand for its hospital-administered drugs.
ViacomCBS (NASDAQ:VIAC) Inc (O:VIACA) jumped after beating analysts' estimates for quarterly revenue due to high demand for streaming.