US stocks closed higher on Thursday for a second straight session, but that was possible thanks to an initial surge driven by stimulus hopes. After US House Speaker Nancy Pelosi criticized the counteroffer made by the Trump administration, which seeks a $1.6 trillion stimulus package instead of Democrats’ $2.4 trillion one, those hopes were smashed, and equities made a u-turn. Still, the gloomy mood at the end of the session walked by tech stocks, which continued their intra-day rally until the end of the day.
Nasdaq was the best performer of the three, adding 1.42%. Elsewhere, the S&P 500 and Dow gained 0.53% and 0.13%, respectively. Seven of the S&P 500’s major sectors ended the session higher, with real estate being the best performer and energy the biggest loser.
However, at the time of writing, none of Thursday's bullish support is relevant for the Wall Street indexes anymore, as they will tumble on Friday. Futures on Nasdaq have slumped 2%, and Dow along with S&P 500 futures show similar losses on the latest news that President Donald Trump and his wife were tested positive for coronavirus. Trump tweeted that they would begin the quarantine recovery process immediately. The news came shortly after it was found out that Hope Hicks, the president’s trusted aide and top adviser, had also tested positive for COVID. Hicks travels with Trump and other senior aides on a regular basis.
Investors turned somewhat bearish on Thursday after Pelosi criticized the $1.6 trillion stimulus offer made by US Treasury Secretary Steven Mnuchin. Pelosi said that this wasn’t half a loaf but the heel of the loaf. Moreover, in breaking news that came a few hours ago after Wall Street closed, Democrats passed their $2.4 trillion bill to the vote, ignoring Trump’s alternative. However, it most likely won’t get the support from Republicans and won’t pass at all, leaving the economy without any support.
As for the economy, it seems that the recovery continues, though at a slower pace. The US Labor Department said the jobless claims rose 837,000 last week, which is less than the 850,000 filers expected by economists. US consumer spending is losing pace due to the wobbly jobs market.
In Asia, the Tokyo Stock Exchange resumed trading on Friday after the biggest glitch in its system experienced yesterday. Nikkei 225 opened higher but is now down 0.72% after the news about stimulus failure and Trump’s coronavirus test. The same is true about Australia’s S&P/ASX 200, which has lost 1.39% so far on Friday.
In rest, markets in China, Hong Kong, South Korea, and India are closed in observance of national holidays.
In individual corporate news, Exxon Mobil fell 3.5% as it reported bigger-than-expected Q3 loss amid declining oil prices. Elsewhere, Boeing rose 1.6% after US Federal Aviation Administration Chief Steve Dickson made positive comments about his 737 MAX test flight.
