US Markets Close Higher On Package Hopes

US stocks ended higher on Thursday as comments by President Trump fuelled hopes of fresh fiscal support, while data underscored the view that the labour market recovery was struggling to gain momentum.

Two days after calling off negotiations on a comprehensive bill, Trump in an interview with Fox News said talks with Congress have restarted over further Covid-19 relief and that there was a good chance a deal could be reached. But he gave no other details about a possible agreement.

While late afternoon trading was choppy, indexes added to gains after a White House spokeswoman said Trump wanted a "skinny" coronavirus relief bill.

House of Representatives Speaker Nancy Pelosi said legislation to help airlines was a matter of national security and could only move through Congress with guarantees of work continuing on the comprehensive deal.

"We're clearly being pushed around by the prospect of getting further fiscal stimulus. That's entirely the driver," said Art Hogan, chief market strategist at National Securities in New York. "The market is just reacting to every utterance of where we stand on fiscal policy."

The Dow Jones Industrial Average rose 0.4 percent to 28,425, the S&P 500 gained 0.8 percent to 3,446 and the Nasdaq Composite added 0.5 percent to 11,420.

Data on Thursday showed the number of Americans filing new claims for jobless benefits drifted lower last week but signaled the labour market was making little headway in getting millions of people back on the job after being out of work due to Covid-19 disruptions.

Strategists say investors are also beginning to digest the prospect of Democratic presidential nominee Joe Biden winning the November 3 election.

Biden appeared to lead Trump among likely voters in Florida and the two were locked in a tight race in Arizona, according to Reuters/Ipsos opinion polls released on Wednesday.

"What the market is actually starting to warm up to is a Democratic sweep in the election cycle. If it's a decisive win, you take away the drama of a contested election," Hogan said. (Reuters)