USA close: Stocks continue rally following surprise jobless figures

Andrew Cummings
August 7, 2020

The Nasdaq Composite also closed above 11,000 for the first time ever on Thursday.

It highlights the damage that a resurgence in coronavirus cases across much of the country is doing to the economy.

USA stock futures rose on Wednesday after Disney squeezed out a quarterly profit, despite taking a US$5 billion charge due to the pandemic, while investors awaited data on private payrolls and the service sector to gauge the country's economic health. Economists warn the picture could be far worse than in June.

"Tomorrow's employment report should provide a little more clarity on whether or not businesses are starting to hire again or if there is continued trepidation due to Covid", said Brian Price, head of investment management at Commonwealth Financial Network. Investors say such a package is crucial and needs to arrive quickly, with millions of Americans still out of work and $600 in weekly unemployment benefits from the USA government having recently expired.

A souring tone from both sides during Wednesday's talks indicates that a long slog remains, though. The White House on Wednesday moved to increase pressure on Democrats to get the deal done, saying they were prepared to walk away from negotiations and use executive actions by President Trump if an agreement isn't within reach by the end of the week. But almost half the stocks in the S&P 500 were lower following a mixed set of earnings reports. Becton Dickinson sank 8.4% after it gave a forecast for earnings this fiscal year that fell short of analysts' expectations.

The stock market is coming off five consecutive days of gains as the technology sector built on its momentum. After rising 1.1% in morning trading, it's at roughly $1.89 trillion.

The Federal Reserve last week said that it will keep interest rates at their record low levels, as it continues to pump massive amounts of aid into the economy.

Unemployment Rate in the U.S. fell to 10.2% in July.

Some analysts have been concerned about the wide disconnect between the bond market, which is still showing so much caution, and the stock market, which has rallied back toward record heights.

Gold also continued its record run as investors looked for safety. Gold for delivery in December rose $34.70 to settle at $2,021.00 per ounce.

European markets were higher across the board, with Germany's DAX up 0.57 percent, Britain's FTSE higher by 0.17 percent and France's CAC edging up 0.13 percent.

Benchmark U.S. crude rose 49 cents to settle at $42.19 per barrel. Brent crude, the worldwide standard, rose 0.6% to $45.46 per barrel.

Asian markets were mixed.

The Russell 2000 index of small company stocks gained 29.02 points, or 1.9%, to 1,546.24. The Hang Seng in Hong Kong lost 0.7%, but stocks in Shanghai added 0.3%.

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