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U.S. Stocks Climb to Start New Quarter

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10/01/2020 | 10:26am EDT

By Caitlin Ostroff

U.S. stocks continued their march higher Thursday, following the S&P 500's best six-month performance since 2009, as central banks' stimulus measures keep markets buoyant.

The S&P 500 gained 0.6%. Despite a decline in September, the benchmark is up more than 35% over the past six months. The Dow Jones Industrial Average rose 0.4%. The Nasdaq Composite increased 1%.

Appetite for risky assets that typically generate higher returns -- including stocks -- continue to be buoyed by the flood of cheap money unleashed by central banks and governments.

"If you look at the market, it's telling you that we're going to get a recovery next year. I'm convinced we're in a new bull market," said Patrick Spencer, managing director at U.S. investment firm Baird. "Even with the election, behind all that is central banks and liquidity."

Shares of Boeing rose 4% after the plane maker got a tentative personal endorsement for fixes to its beleaguered 737 MAX from the head of the Federal Aviation Administration. Shares in PepsiCo fell slightly even after the drinks and snacks company beat earnings estimates.

Coronavirus infections are another point of focus. Infection rates in the U.S. have remained elevated for some months, and health experts have warned that the colder months may bring a new wave of cases. Although investors don't expect to see a repeat of the spring's stringent lockdowns, fresh restrictions could threaten recovery in the labor market and weigh on consumer spending, which accounts for more than two-thirds of the U.S. economy.

About 837,000 Americans applied for new unemployment benefits through the week ended Sept. 26, down from 873,000 the week before, signaling an improving labor market though unemployment remains high. New figures from the Department of Commerce showed that U.S. consumers boosted spending by 1% in August from the month prior.

U.S. consumer spending rose 1% in August while incomes fell, in part in part because of a decline in government aid for unemployed workers.

Investors continue to assess whether Congress will pass another aid package that would bolster U.S. economic growth ahead of the elections, though such hopes have largely receded in recent weeks.

A renewed burst of optimism this week -- prompted by talks between Republican and Democratic leaders -- began to fade Wednesday after the House postponed a vote on a $2.2 trillion package. Democrats are trying to find common ground with the White House on a bipartisan agreement, though they remain far apart on key issues.

"The big wild card in the U.S. is whether we get more fiscal spending or not," said Gregory Perdon, co-chief investment officer at private bank Arbuthnot Latham. "The political backdrop is just so toxic."

In bond markets, the yield on the benchmark 10-year Treasury ticked up to 0.718%, from 0.677% Wednesday.

Overseas, the pan-continental Stoxx Europe 600 rose 0.3%. In Asia, the Tokyo Stock Exchange halted all stock trading for Thursday due to a system problem and said it expects to resume normal trading Friday. Markets in China, Hong Kong and South Korea were closed for a holiday.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

(END) Dow Jones Newswires

10-01-20 1025ET


Stocks mentioned in the article
ChangeLast1st jan.
DJ INDUSTRIAL -0.10% 28335.57 Delayed Quote.-0.71%
NASDAQ 100 0.25% 11692.571891 Delayed Quote.33.89%
NASDAQ COMP. 0.37% 11548.281629 Delayed Quote.28.71%
PEPSICO, INC. -0.04% 139.56 Delayed Quote.2.11%
S&P 500 0.34% 3465.39 Delayed Quote.7.26%
STOXX EUROPE 600 0.62% 362.5 Delayed Quote.-12.83%
STOXX EUROPE 600 NR 0.62% 797.33 Delayed Quote.-11.16%
THE BOEING COMPANY -1.01% 167.36 Delayed Quote.-48.10%
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