Wall Street Pares Early Losses On Stimulus Hope

Major averages closed on Thursday with a rebound from early lows as investors looked for signs of progress in fiscal stimulus talks to support the economy after labour market data showed a jump in jobless claims.

Stocks on Wall Street opened lower on the heels of weekly initial jobless claims data that spiked by 137,000 to a seasonally adjusted 853,000, well above expectations for 725,000 and the highest level since mid-September, underscoring the need for fresh stimulus measures to support a flagging economy.

But equities moved well off lows that saw the S&P 500 down as much as 0.75 percent after US Treasury Secretary Steven Mnuchin said talks between Republican and Democratic senators on Covid-19 relief were making "a lot of progress" with more discussions expected in the day.

"The competing narrative of the virus is here, it is worse, the natural pullback of the economy because of that and the lack of uncertainty around the timeline and magnitude of the package is going to be a daily struggle with pretty volatile moments in the interim," said Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta.

"If this is the start of a trend, we will test the capacity of the market to remain optimistic by looking past a really tough environment that is on the ground right now."

The Dow Jones Industrial Average fell 0.23 percent, to 29,999, the S&P 500 lost 0.13 percent, to 3,668 and the Nasdaq Composite added 0.54 percent, to 12,406.

Airbnb's shares opened at US$146 in their debut, far above the initial public offering (IPO) price of US$68 apiece, raising US$3.5 billion for the home rental firm, with shares closing at US$144.71. The offering comes on the heels of a blowout debut for Wednesday's high profile IPO DoorDash.

The S&P energy index closed at a six-month high as Brent crude prices surged above US$50 a barrel for the first time since early March. (Reuters)