Stocks Rise on Hopes that Stimulus Deal is "Just About There"

The market heard something it liked regarding a stimulus deal in Thursday’s session, allowing the major indices to record their second positive performance in the past three days. However, stocks still go into Friday with losses for the week.

Speaker Pelosi said an agreement was “just about there”. Of course, big issues remain unresolved and actually passing a deal will take time. If that sounds familiar, it's because we've been hearing something like that for a few weeks now. "We're all hopeful that something can get done, but..."

Nevertheless, this headline-driven market felt it was good enough to advance.

The Dow increased 0.54% (or about 152 points) to 28,363.66, while the S&P was up 0.52% to 3453.49. The NASDAQ improved 0.19% (or about 21 points) to 11,506.01.

The NASDAQ is on a four-week winning streak, while the S&P and Dow have each put together three week runs. It would take a mighty rally tomorrow to keep these streaks going. But you never know!

Meanwhile, last week saw jobless claims of 787,000, which broke a couple weeks of disappointing results. In fact, the number was almost 100K better than expectations and 55K lower than last week.

It’s also one of the best readings of the pandemic era, which stretches back to March.

In other encouraging news, Gilead Sciences (GILD) announced that the FDA approved remdesivir as a treatment for the coronavirus. Shares of GILD are up approximately 4.5% afterhours, as of this writing.

Shares of Intel (INTC) plunged more than 9% after hours, despite the chipmaker beating expectations. Apparently, investors were not happy with results from its data business.

Tesla (TSLA) rose 0.75%, a day after the electric car company beat on both earnings and revenue for its recent quarter. And Netflix (NFLX) is still caught on the negative side following its disappointing results a couple days ago, but it was only off 0.78% on Thursday.

Tomorrow won’t be as hectic with earnings as was today, but we'll still see reports from American Express (AXP), Illinois Tool Works (ITW) and many others.

Today's Portfolio Highlights: 

Surprise Trader: Earnings season rolls on and so do the buys in this portfolio. On Thursday, Dave added transportation and logistics company Werner (WERN) with a 10.6% allocation. This Zacks Rank #1 (Strong Buy) is obviously part of the Transportation – Truck space, which means it’s in the top 2% of the Zacks Industry Rank. It has beaten for three consecutive quarters with a surprise of 55% last time. WERN seems set for a fourth straight beat after the bell on Wednesday, October 28. The stock has a positive Earnings ESP of 2.78%. The editor also sold Sonoco (SON) today after a negative reaction to its earnings. Read the full write-up for more on today’s moves. 

Options Trader: "Uncertainty over stimulus continues. But more positive signals were sent by the Speaker today when she said 'we're just about there.'

"As I mentioned yesterday, if a deal has any chance of getting passed before the election, it will likely need to get done by week's end so it can get voted on by the Senate. But even then, it will have to be marked up, and debated first. That takes time. And it still has to pass.

"Nonetheless, just getting the White House and the Speaker to come to an agreement would be a huge first step to getting it done. And whether it gets implemented before the election or after will not make too much of a difference to the market. Each day, of course, is vital to the individuals and businesses who need the help. But in aggregate, as long as the money is coming, it should be supportive for stocks."
-- Kevin Matras

Until Next Time,
Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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