US stocks close higher, oil bounces as tax aid talks advance

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NEW YORK (Reuters) – Wall Street soared and crude oil prices soared Thursday as reports of new developments surfaced in pandemic aid negotiations in Washington.

The 11 Wall Street door of the New York Stock Exchange (NYSE) can be seen in New York City, New York, United States on June 26, 2020. REUTERS / Brendan McDermid

All three major US stock indices gained, with smaller capitalization stocks significantly outperforming their larger counterparts.

US House of Representatives spokeswoman Nancy Pelosi, while expressing her confidence that she could reach a deal with Treasury Secretary Steven Mnuchin, said Thursday that legislation designed to help airlines survive the pandemic comes with only guarantees could go through Congress that the legislature would work on a “broader” work bill. “

White House adviser Larry Kudlow said the Trump administration would like to see “stand-alone” bills to provide additional unemployment benefits and extend the paycheck protection program, but also told Fox News that the economic recovery is not of one Economic agreement depends.

Senate Chairman Mitch McConnell, meanwhile, warned that there are still “big differences” between Democrats and Republicans in the size of a new round of tax aid.

“Today’s back and forth is a microcosm we’ve seen over the past few weeks,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina. “The door appears to be open and then closes quickly.”

“But at least the two sides are still talking to each other, leaving a chance for a solution, possibly before a choice,” added Detrick.

Democratic candidate Joe Biden has been advancing in the polls ahead of the November 3rd election.

“The chance of a blue wave is increasing and you could say the markets like it,” said Detrick. “The stock markets don’t want controversial elections, and Biden’s leadership growth brings a little water to the fire.”

The US Department of Labor reported that jobless claims remain well above their highest levels seen at the bottom of the Great Recession, suggesting that the labor market recovery may stall.

The Dow Jones Industrial Average rose 122.05 points or 0.43% to 28,425.51, the S&P 500 rose 27.38 points or 0.80% to 3,446.83 and the Nasdaq Composite rose 56.38 points or 0.5% to 11,420.98.

European stocks joined the world rally as signs of movement in coronavirus aid talks lifted global sentiment.

The pan-European STOXX 600 index rose 0.78% and the MSCI global stock index rose 0.79%.

Government bond yields fell and the yield curve flattened after weaker than expected economic data and in light of the ongoing uncertainty surrounding coronavirus relief talks.

The 10-year benchmark debt was last up 6/32 to 0.7652% from 0.785% late Wednesday.

The 30-year bond last rose 18/32 to 1.5642% from 1.589% late Wednesday.

Crude oil prices surged above $ 43 a barrel as supply came under pressure from hurricane standstills, an ongoing strike by oil workers in Norway, and possible production cuts by OPEC.

US crude oil futures were up 3.10%, trading at $ 41.19 a barrel, while Brent was trading at $ 43.34 a barrel, up 3.22% that day.

Shares versus COVID:

The dollar barely changed against a basket of world currencies as market participants waited for further economic developments.

The dollar index fell 0.01%, the euro unchanged at USD 1.176.

The Japanese yen lost 0.02% against the greenback at 106.01 the dollar while the pound sterling last traded at $ 1.2934, up 0.12% on the day.

Electoral uncertainty and optimism about the pandemic also contributed to the gold.

Spot gold rose 0.3% to $ 1,893.54 an ounce.

Reporting by Stephen Culp; Additional coverage from Marc Jones; Adaptation by Sonya Hepinstall

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