Dow Trims Some Gains as Pelosi Rejects Piecemeal Stimulus
Investing.com
Published Oct 08, 2020 01:13PM ET
Updated Oct 08, 2020 03:05PM ET
By Yasin Ebrahim
Investing.com – The Dow cut some gains on Thursday after U.S. House Speaker Nancy Pelosi said she would not back airline relief without a broader coronavirus aid package, cooling investor hopes for further stimulus.
The Dow Jones Industrial Average rose 0.21%, or 70 points. The S&P 500 was up 0.63%, while the Nasdaq Composite added 0.32%.
"There is not going to be any stand-alone bill unless there is a bigger bill and it can be part of that, or it could be in addition to it," Pelosi said. Earlier this week, Trump said he was ready to sign off on standalone stimulus bills, including support for individuals, small businesses and airlines.
Airlines dropped on the news, but pared some losses.
Delta Air Line (NYSE:DAL), United Airlines Holdings (NASDAQ:UAL), and American Airlines Group (NASDAQ:AAL) were in the green.
American Airlines told CNBC it would be forced to terminate service to additional U.S. markets without additional aid from Congress.
Stocks tied to the economy, however, continued to trend above the flatline, with financials, industrials, and energy higher.
Energy led the broader market higher, underpinned by rising oil prices amid hurricane-related disruptions in the U.S. Gulf of Mexico and positive comments from OPEC on long-term oil demand.
OPEC forecasts global oil demand will surpass the pre-pandemic levels in 2022 and grow steadily until the late 2030s, when it will begin to plateau.
Tech, meanwhile, continued to rack up gains. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB), and Alphabet (NASDAQ:GOOGL) traded higher.
Elsewhere in tech, International Business Machines (NYSE:IBM) said it would spin off its managed infrastructure services business into a separate public company. The move comes as 'Big Blue' seeks to ramp-up its hybrid cloud growth.
" IBM is essentially getting rid of a shrinking, low margin operation given the cannibalizing impact of automation and cloud, masking stronger growth for the rest of the operation," Wedbush said, though added that IBM's medium-term growth forecasts appeared "aggressive."
Tesla (NASDAQ:TSLA) also fueled the move higher in the tech-heavy Nasdaq, rising 1% after New Street upgraded the stock to buy from neutral, with a street-high price target of $578.
On the economic front, the Labor Department said 840,000 people filed for unemployment support for the first time in the week ended October 3, down 9,000 from the prior week's upwardly revised 849,000, and above economists' estimate of 820,000.
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