Shares rose Thursday as traders weighed recent comments from House spokeswoman Nancy Pelosi and President Donald Trump on further tax aid.
The Dow Jones Industrial Average closed 122.05 points, or 0.4%, at 28,425.51, its highest level in a month. The S&P 500 gained 0.8% to end the day at 3,446.83. The Nasdaq Composite rose 0.5% to 11,420.98.
Airline stocks were higher in volatile trading. United and Delta were each trading more than 1% higher. American Airlines gained 0.6%. The airline’s three stocks were briefly lower before rebounding. IBM stocks rose nearly 6% to lead the Dow up after the company announced it would be outsourcing its IT infrastructure unit.
Pelosi, D-Calif., Told reporters that there would be no stand-alone airline stimulus plan without a major aid package – something President Donald Trump had pushed the day before. Earlier in the day, Trump told Fox Business that the government and Democrats were "starting to have some very productive talks".
"We'll see if we can do something before the election. That would be a favorable outcome," said Gregory Faranello, director of US interest rate trading at AmeriVet Securities. "If that changes, we could see another slip in the market like we saw on Tuesday."
Investors also digested the latest weekly US unemployment claims data Thursday, which shows an additional 840,000 Americans have filed for unemployment benefits for the first time. Economists polled by Dow Jones expected a total of 825,000 initial unemployment insurance claims in the week ending October 3.
Wall Street had a tough session and the Dow posted its biggest one-day gains since mid-July on Wednesday.
"While there is currently uncertainty about fiscal stimulus negotiations, regardless of who wins the election, we will likely receive additional fiscal stimulus," said Nancy Davis, founder and portfolio manager at Quadratic Capital.
"Given the uncertainty, I think it is important for investors to have a diversified portfolio with uncorrelated investments. We should expect more uncertainty going forward," she added.
Key October averages are higher after reclaiming losses in September, the market's first negative month since March. That said, a number of risks remain in the market, including rising Covid-19 cases around the world and a slowdown in economic recovery.
"The risks we now face – medical, economic and political – have increased and decreased over the year, so a difficult quarter will be nothing new," said Brad McMillan, chief investment officer, Commonwealth Financial Network.
"In fact, after the elections, there's a good chance the next year will look a lot better. We'll have to wait but be prepared for the volatility for now – but remember it will pass," he added.
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