Stocks are flat as investors wait on stimulus bill deal
Stocks were flat on Thursday as traders pored over better-than-expected unemployment data and kept an eye on Washington for clues on a new coronavirus stimulus package.
The Dow Jones Industrial Average rose less than 1 point. The S&P 500 dipped 0.1% along with the Nasdaq Composite.
Materials, utilities and energy were the worst-performing S&P 500 sectors. A 1.6% gain in Pfizer was offset by declines in Disney and Boeing within the Dow.
The Labor Department said initial jobless claims for the week ending Aug. 1 totaled 1.186 million. That’s well below a Dow Jones estimate of 1.423 million and the lowest claims levels since the pandemic began.
“The overall tone of the jobless claims data is the best it has been in 3 weeks or so,” said Thomas Simons, money market economist at Jefferies, in a note. “The decline is the biggest since the week of June 6, so the data does not have the same sort of ‘stalling out’ theme that we have seen in recent weeks.”
“However, one cannot help but notice the date of the reference week, August 1, which is the day after the $600 per week enhance benefit provided by the CARES Act expired,” Simons said. “So, is the drop this week related to an improvement in the labor market? Or is it related to folks who had some agency in their employment situation electing to collect the benefit rather than return to work now no longer being able to do so?”
The data came a day before the government’s monthly nonfarm payrolls report, which is expected to show jobs growth of 1.264 million for July.
Wall Street was coming off a solid session in which the Nasdaq Composite notched another record close and the S&P 500 ended within 2% of its Feb. 19 all-time high.
Thursday’s moves also comesas lawmakers struggle to reach a deal on a new coronavirus relief package. The White House appeared to yield slightly on its opposition to continued federal support for unemployment benefits. The Trump team offered to extend extra federal unemployment insurance into December at $400 per week, NBC News and Politico reported.
Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows also offered to extend a moratorium on evictions from federally backed housing into December. Democrats, meanwhile, cut their request for U.S. Postal Service funding to $10 billion from $25 billion, according to the reports.
However, Senate Majority Leader Mitch McConnell told CNBC’s “Squawk on the Street” that lawmakers were still at odds over how much stimulus is appropriate.