Stocks drift to mixed close; S&P 500 ekes out another record
U.S. stock indexes capped a day of choppy trading with a mixed finish Thursday, though solid gains by technology companies helped lift the Standard & Poor’s 500 and Nasdaq composite to more record highs.
The S&P 500 edged up less than 0.1%. Traders bid up shares in Big Tech stocks, including Apple, Amazon and Facebook. Those gains helped outweigh losses in energy, banking and other sectors. Stocks of smaller companies, which have led the way higher this year, gave up some of their recent gains.
Stocks have been mostly grinding higher this month amid optimism that COVID-19 vaccines will lead to an economic recovery and expectations that Washington will deliver more stimulus for the economy. More recently, better-than-expected results from companies reporting quarterly earnings have helped keep U.S. stock indexes hovering near record highs or notching new ones.
The S&P 500 rose 1.22 points to 3,853.07, even as more stocks in the index closed lower. The Dow Jones industrial average slipped in the final minutes of trading, shedding 12.37 points, or less than 0.1%, to 31,176.01. The tech-heavy Nasdaq composite climbed 73.67 points, or 0.6%, to 13,530.91. The Russell 2000 index of smaller companies fell 19.20 points, or 0.9%, to 2,141.42.
Optimism about a strengthening economy later this year has been powerful enough to paper over worries about today’s struggles. On Thursday, a report showed that 900,000 U.S. workers filed for unemployment benefits last week, as the worsening pandemic forces businesses to shut down and lay off employees. The number was less terrible than the prior week’s 926,000, but it’s still incredibly high.
Wall Street has actually seen such miserable numbers as a reason for optimism in the past, perversely, because they add to the urgency on Congress to deliver more aid for the economy.
President Biden has proposed a $1.9-trillion plan, including cash payments for most Americans and other assistance for the economy. Even though his Democratic Party controls both houses of Congress, the proposal probably will face resistance given how slim the majority is.
Other reports on the economy Thursday were more encouraging, including better-than-expected data on the home-building industry and manufacturing in the Philadelphia region.
More companies are also telling investors how badly their profits got hit during the last three months of 2020, when COVID-19 case counts and deaths were soaring. Wall Street came into this earnings reporting season with low expectations, forecasting a fourth straight quarter of profit declines. But most companies have been topping expectations.
Travelers rose 2.6% after the insurer reported a much stronger profit for the latest quarter than analysts expected.
Home builders rose after the encouraging report on housing starts, led by Beazer Homes USA’s 5.1% gain. Paccar climbed 10.5% for the biggest gain in the S&P 500 after saying it will partner with autonomous-vehicle company Aurora to develop self-driving Peterbilt and Kenworth trucks.
On the losing end was United Airlines, which lost 5.7% after reporting a worse loss for the end of 2020 than analysts expected. The worsening pandemic is keeping fliers out of the skies, and the company’s forecast for revenue at the start of 2021 fell short of analysts’ expectations.
The yield on the 10-year Treasury rose to 1.10% from 1.07% late Wednesday.
Besides optimism about vaccines and the prospect for more stimulus from Washington, huge actions by central banks around the world are also helping to prop up stock markets. The Federal Reserve has its first policy meeting of the year next week, and has said it doesn’t expect to pull interest rates off their record lows anytime soon. Low rates can help push up prices for stocks and other investments.
The European Central Bank said Thursday that it would hold interest rates steady and leave its bond-purchase stimulus program unchanged.
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