Wall Street shakes off labor market data with stimulus in focus

NEW YORK: Major averages closed on Thursday with a rebound from early lows as investors looked for signs of progress in fiscal stimulus talks to support the economy after labor market data showed a jump in jobless claims.

Stocks on Wall Street opened lower on the heels of weekly initial jobless claims data that spiked by 137,000 to a seasonally adjusted 853,000, well above expectations for 725,000 and the highest level since mid-September, underscoring the need for fresh stimulus measures to support a flagging economy.

But equities moved well off lows that saw the S&P 500 down as much as 0.75% after US Treasury Secretary Steven Mnuchin said talks between Republican and Democratic senators on COVID-19 relief were making "a lot of progress" with more discussions expected in the day.

"The competing narrative of the virus is here, it is worse, the natural pullback of the economy because of that and the lack of uncertainty around the timeline and magnitude of the package is going to be a daily struggle with pretty volatile moments in the interim," said Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta.

"If this is the start of a trend, we will test the capacity of the market to remain optimistic by looking past a really tough environment that is on the ground right now."

The Dow Jones Industrial Average fell 69.55 points, or 0.23%, to 29,999.26, the S&P 500 lost 4.72 points, or 0.13%, to 3,668.1 and the Nasdaq Composite added 66.86 points, or 0.54%, to 12,405.81.

Airbnb Inc's shares opened at $146 in their debut, far above the initial public offering (IPO) price of $68 apiece, raising $3.5 billion for the home rental firm, with shares closing at $144.71. The offering comes on the heels of a blowout debut for Wednesday's high profile IPO DoorDash.

The S&P energy index closed at a six-month high as Brent crude prices surged above $50 a barrel for the first time since early March. The group has surged 36.2% this quarter, the best performing of the 11 major S&P sectors, as investors have looked to names that could benefit from an economic reopening.

The faltering labor market recovery and the recent surge in COVID-19 infections have piled pressure on policymakers to come up with another rescue package, as most of the government financial aid for Americans and businesses has dried up.

A US Senate vote on a stopgap measure to keep the government running could slip to the Friday deadline, said the Senate's number two Republican, John Thune. The measure would give lawmakers time to work out a larger spending package and coronavirus relief, but House Speaker Nancy Pelosi raised the possibility talks could drag on through Christmas.

Also in focus was a meeting of outside advisers to the US Food and Drug Administration (FDA) later in the day, to decide whether to recommend that the agency authorize Pfizer Inc's COVID-19 vaccine for emergency use.

Some officials said vaccinations could begin as soon as this weekend if the FDA consented.

Volume on US exchanges was 10.31 billion shares, compared with the 1.49 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored advancers.

The S&P 500 posted 10 new 52-week highs and no new lows; the Nasdaq Composite recorded 145 new highs and 11 new lows.