Nasdaq Hits New Record, Powered By Tech Heavyweights

US stock markets 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 and Facebook 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 percent and 7 percent 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 US Labor Department numbers showed a first fall in jobless claims in three weeks, although a separate report showed a 54 percent 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 that 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.

The Dow Jones Industrial Average rose 0.7 percent to 27,386, the S&P 500 gained 0.6 percent to 3,349 and the Nasdaq Composite added 1 percent to 11,108.

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 percent.

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 percent above analyst expectations, according to IBES Refinitiv data, the highest on record since 1994. (Reuters)