Dow Ekes Out Gain as Pelosi Rips White House Offer, Cooling Stimulus Hopes

Dow Ekes Out Gain as Pelosi Rips White House Offer, Cooling Stimulus Hopes  | Oct 01, 2020 21:18

Dow Ekes Out Gain as Pelosi Rips White House Offer, Cooling Stimulus Hopes

By Yasin Ebrahim – The Dow ended well below its session highs Thursday, on rising fears U.S. lawmakers are unlikely to break the impasse on talks for further federal stimulus, though losses were stemmed by an ongoing rise in tech.  

The Dow Jones Industrial Average rose 0.13%, or 36 points. The S&P 500 was up 0.54%, while the Nasdaq Composite gained 1.42%.

House Speaker Nancy Pelosi criticized the counteroffer on a stimulus deal from the White House, cooling investor optimism that both will find a solution sooner rather than later.  "This isn't half a loaf. What they're offering is the heel of the loaf," Pelosi said in a Bloomberg TV interview. She added: "[I]t's no use going into a negotiation if you say, 'I'll just take the path of least resistance.'"

The White House offered Pelosi a $1.6 trillion package, short of Democrats' $2.2 trillion proposal, Bloomberg reported. The counter-offer also included $400 a week in additional unemployment insurance, less than the $600 the Democrats requested, the sources said.

The stimulus bill would also include much-needed aid for the airline industry to stem a wave of layoffs in the wake of weaker travel demand. American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL), rose more than 2% and 1% respectively, moved ahead with plans to cut staff but pledged to reverse the cuts if Congress agreed to roll out aid. 

In the absence of stimulus, however, the recovery in the labor market appears to have continued, though at a slower pace.

The Labor Department reported that 837,000 people filed for unemployment insurance for the week ended Sept. 26, less than the 850,000 filers economists had feared, and the lowest claims count since they were 282,000 during the week of March 14.

Tech, meanwhile, pushed the broader market higher. Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) Alphabet (NASDAQ:GOOGL) (NASDAQ:AMZN) and Facebook (NASDAQ:FB), which together make up a quarter weighting of the S&P 500, closed higher.

Energy proved an exception after oil prices plunged more than 5% as crude demand concerns intensify at a time when coronavirus infections continue to mount.

On the earnings front,  PepsiCo (NASDAQ:PEP) ended more than 1% higher after its full-year guidance and quarterly earnings beat estimates, led by growth in its snack business. The company guided full-year earnings of $5.50 per share, topping consensus estimates of $5.36.

Bed Bath & Beyond (NASDAQ:BBBY) surged 25% after reporting a surprise quarterly profit of 50 cents and its first comparable-store sales growth since the fourth quarter of fiscal 2016. Comp sales grew 6%, compared with estimates for a 2.1% decline.

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