U.S. stocks tick higher, as Wall Street coasts following surge

U.S. stocks are hovering close to their record levels today as Wall Street takes a pause following its rocket ride higher on optimism about a coming COVID-19 vaccine. PHOTO CREDIT: Seth Wenig

NEW YORK — U.S. stocks are inching further into record heights today, as Wall Street continues to coast following its rocket ride on hopes for coming COVID-19 vaccines.

The S&P 500 was up 0.3% in morning trading, a day after inching up to set another all-time high. The Dow Jones Industrial Average was 137 points higher, or 0.5%, at 30,021, as of 9:23 a.m. Central time, and the Nasdaq composite was up 0.7%.

A couple reports that were better than expected on the economy helped support stocks. One showed that growth in the U.S. services sector, including health care and retail, was slightly stronger last month than economists expected. A separate report said fewer U.S. workers filed for unemployment benefits last week than forecast, though economists cautioned the number may have been distorted by the Thanksgiving holiday.

Momentum across markets has slowed after the S&P 500 surged 10.8% last month on hopes that one or more coronavirus vaccines will get the global economy closer to normal next year. The burst of optimism boosted stocks of travel companies, banks and smaller businesses in particular, after they were among the most harshly punished during the pandemic.

Now that stock indexes are back at all-time highs, worries about the still-raging pandemic are making further big gains more difficult. Governments around the world are considering the approval of several coronavirus vaccines, and a U.S. rollout could begin this month if regulators give their approval. Britain has already approved emergency use of a COVID-19 vaccine developed by Pfizer and BioNTech.

But vaccines would initially go out only to protect health care workers and others at high risk. In the meantime, coronavirus counts and hospitalizations continue to surge. That has governments around the world bringing back varying degrees of restrictions on businesses and consumers worried about their own health. That, in turns, is threatening the economic recovery that got underway in the spring.

Across the country, the Labor Department said 712,000 workers applied for jobless benefits last week. That’s an improvement from the 787,000 of the prior week, but it still towers over the roughly 225,000 workers that were applying weekly before the pandemic struck.

One hope that has flickered on and off in markets is that Democrats and Republicans in Washington may get past their bitter partisanship to reach a deal to provide more financial support for the economy. Democrats are making another push for a compromise and have cut their demands for the size of a potential rescue. President-elect Joe Biden urged Congress on Wednesday to pass a relief bill now, with more aid to come next year.

But Democrats and Republicans have been arguing for months without much progress.

On Wednesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin underscored the importance of such relief during a House Financial Services Committee hearing. The economy has been struggling more since extra unemployment benefits and other stimulus approved earlier this year by Congress expired.

Growth in the country’s services industries slowed last month, according to a report from the Institute for Supply Management, though it was the sixth straight month of improvement.

Apparel company PVH rose 7% for one of the biggest gains in the S&P 500 after the company behind the Calvin Klein and Tommy Hilfiger brands reported much stronger profit for the latest quarter than analysts expected.

Several travel-related companies were also at the top of the leaderboard, clawing back more of their precipitous losses from earlier in the pandemic. American Airlines Group rose 8.3%, Norwegian Cruise line gained 6%, and United Airlines climbed 5.7%. All three, though, remain more than 40% lower for 2020.

On the losing end was Kroger, which fell despite 4.2% despite reporting a stronger profit for its latest quarter than analysts expected. The grocer’s revenue fell short of forecasts. Expectations may also have built too high after its stock performed better than the rest of the S&P 500 through much of the pandemic.

The yield on the 10-year Treasury dipped to 0.93% from 0.94% late Wednesday.

In energy markets, oil prices were modestly higher as talks continue among OPEC countries on production levels. The talks are due to include Russia Thursday.

U.S. benchmark crude oil was up 0.2% at $45.36 per barrel. Brent crude, the international standard, was 0.2% higher at $48.36 per barrel.

In European stock markets, the German DAX lost 0.4%, and the French CAC 40 fell 0.2%. The FTSE 100 in London rose 0.4%.

In Asia, Japan’s Nikkei 225 was virtually flat. South Korea’s Kospi rose 0.8%, Hong Kong’s Hang Seng gained 0.7% and stocks in Shanghai slipped 0.2%.